There is, perhaps, no problem looming larger with the Internal Revenue Service than taxpayer identification protection. The recent news of an IRS data breach bodes poorly for the Agency as its ongoing efforts to thwart stolen identities has been less than successful. Now the Internal Revenue Service has announced that it is collaborating with leading tax preparation and software firms, payroll and tax processors, and state tax administrators to protect taxpayers from identity theft tax fraud.
In March 2015 Internal Revenue Service Commissioner John Koskinen hosted a Security Summit with executive officers and leaders from the private sector to collaborate to stop identity theft tax fraud. The effort at the Summit was intended to increase information sharing between industry and governments. During the summit, three working groups or teams were established that include members from several groups. As a result of meetings held over the last 12 weeks, the groups have agreed to several new initiatives, including:
- taxpayer authentication,
- fraud identification,
- information assessment,
- cyber security framework, and
- taxpayer awareness and communication
Emphasizing the progress made at the Summit, the Commissioner noted that, “Taxpayers filing their tax returns next filing season should have a safer and more secure experience.” Additional information can be found on the IRS website.
Identity theft appears to be a problem that is here to stay, and maintaining alliances with tax software processing companies within the private sector will be an ongoing venture as hackers look to invent new ways to overcome protections built into the Internal Revenue Service systems. However, this collaborative effort is important first step in working to minimize stolen taxpayer identities.
Information for victims of identity theft can be found at the FTC website: www.identitytheft.gov
Previous IRS Action
Identity theft places a burden on its victims and presents a challenge to businesses, organizations and government agencies, including the IRS. Tax-related identity theft occurs when someone uses a stolen social security number to file a tax return claiming a fraudulent refund. Per their website, the IRS combats tax-related identity theft with an aggressive strategy of prevention, detection and victim assistance. Progress against this crime is being made, but it remains one of that agency’s highest priorities.
In its efforts to combat identity theft, the IRS is stopping suspicious tax returns that have indications of identity theft, but contain a real taxpayer’s name and/or social security number. In these cases, the IRS is sending out (by US Postal Service) Letter 5071C to request that the taxpayer verify his/her identity. Remember, the IRS will never email or telephone the taxpayer directly to request this information.
Taxpayers may use the IRS site: IDVerify.irs.gov (noted by the IRS as the safest, fastest option) or call a toll-free number on the letter to confirm their identities. Once their identities are verified, taxpayers can confirm whether or not they filed the return in question. If so, it will take approximately six weeks to process it and issue a refund. If the real return was not filed by the taxpayer, the IRS can take steps at that time to assist him/her.
Click here to read the complete release: IR-2015-54, dated March 18, 2015.