13 July 2016 IRS expands efforts to combat tax-related identity theft, Form W-2 verification codes continue for 2016 The Internal Revenue Service announced that it is expanding its efforts to combat tax-related identity theft for the 2017 filing season, including a continuation of the Form W-2 verification code program. During 2015, the IRS convened a Security Summit with public and private tax administration leaders joining to combat tax-related identity theft. Summit participants include IRS officials, leading tax preparation firms, software developers, payroll and tax financial product processors and state tax administrators. Among its recommendations, the Summit established a verification code pilot program for the 2016 filing season. The pilot involved 2 million employees whose 2015 Forms W-2 contained a 16-digit alphanumeric code. If the verification code appeared on employees' Form W-2, they were required to provide the code when filing their Forms 1040 electronically. (For more information see our webcast replay, 2015 employment tax year in review.) The Summit's 2017 initiatives include an expansion of the verification code program to over 50 million Forms W-2 filed in 2017 (for tax year 2016). The Summit concluded that the 2016 pilot (for tax year 2015) was extremely successful in verifying the information on Forms W-2 and prevented fraudsters from using counterfeit Forms W-2 to obtain fraudulent income tax refunds. The Summit is implementing additional taxpayer safeguards for the upcoming 2017 filing season, including: — An expansion of the 20 data elements that states and the IRS receive from individual returns to authenticate taxpayer data and identify possible identity theft scams. — A 2017 implementation of an external leads program to allow the financial industry to identify state tax refunds that appear fraudulent and return them to states for validation and review. — Confirmation of identity theft account information will be provided to industry and states at the start of the filing season to provide Summit partners with the opportunity to analyze the information and update their internal fraud and processing filters. — The launch of the new Identity Theft Tax Refund Fraud Information Sharing & Analysis Center in 2017. This will allow for significant gains in detecting and preventing identity theft refund fraud and will provide better data to law enforcement to investigate and prosecute identity thieves.
Document ID: 2016-1211 | ||||||||||||||||||||||
