Friday, November 4, 2016

Federal Tax Fraud Down 50 Percent for 2016

Image Courtesy of Pixabay

A recent article on the Internal Revenue Service website states that fraudulent tax returns decreased by 50 percent last year with only approximately 250,000 fewer taxpayers claiming identity theft on their federal returns.

That decrease is due to group efforts by the IRS and the Security Summit Initiatives. These tactics improved not only the professional approach to filing tax returns but also the taxpayer approach through education in recognizing phishing email and phone calls in which taxpayers previously gave up personal information such as credit card and social security numbers.

Increased Safeguards for Secure Online Filing

The IRS has been working with several state and industry leaders to implement safeguards that will continue to stop fraudulent returns from being processed. Among those elements is the usage of specific data components that will strengthen the authentication process when filing tax returns online and through tax software.

The W2 verification code, a 16-digit code that is entered into tax software to validate the information on a W2, will continue to be used for the 2017 tax season and it will be expanded for use to 50 million W2’s this year versus only 2 million in 2016.

The IRS and the Security Summit leaders have taken action to enforce stronger data protection along with “red flags” that will identify suspicious refunds going to fraudsters and stop the transactions before electronic deposits are made.

New Project Brings Greater Safety

A new center called the Identity Theft Tax Refund Fraud Information Sharing and Analysis Center will share information between public and private sectors including law enforcement. The information includes uncovering the newest identity theft schemes so that stop-gaps can be quickly created with little to no harm to businesses or individuals.

Want To Learn What You Can Do?

The IRS has published Security Awareness for Taxpayers, a fact sheet that shares may ways in which a taxpayer can protect their information and lessen their chances of falling victim to identity thieves.

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