Monday, December 12, 2016

New Safeguard for 2017


Building on the successes of last year, the IRS, state tax agencies and the tax industry are enacting a series of new initiatives for 2017. These initiatives will better protect you from identity theft and refund fraud. However, we need your help. Everyone has a role to play in protecting data.

In the tax community, we’ve been working together since 2015 to put in place improved safeguards. These safeguards make it harder for identity thieves to file fraudulent returns successfully. That means identity thieves try to steal even more data to impersonate taxpayers.

Many of the changes will be invisible to taxpayers but will be invaluable to helping keep you safer from identity thieves. Our focus is on “trusted customer” features that help us authenticate both the taxpayer and tax return. Here are a few things we’re doing for 2017:

Sharing new data elements from tax returns. This helps us validate the return and the taxpayer. These elements include items such as the time it takes to complete the return. This helps us guard against mechanized computer fraud.
Sharing new data elements from business tax returns. This extends more identity theft protections to business filers as well as individuals.
Creating a new program between states and the financial industry. This allows banks and others to flag suspicious refunds.
Expanding the Form W-2 Verification Code initiative.  This initiative, started by the IRS last year, expands to 50 million forms in 2017 from 2 million in 2016. When completing a tax return, users enter a 16-digit verification code when prompted by the tax software. Both individuals and tax professionals use this code to validate the information on the Form W-2. The IRS anticipates in future years that the initiative will impact all Forms W-2.
Continuing to enhance software password requirements for individuals and tax professional users. This provides additional safety prior to filing.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

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