Identity theft is a significant problem that is increasingly prevalent in today’s digital society. Unfortunately, some criminals view tax season as a prime time for stealing identities. Cyber-thieves have stolen millions of dollars in federal refunds in recent years by using taxpayer information they were able to hack from the IRS website. The IRS has increased efforts to prevent this fraud for the 2016 season.
4 Ways the IRS Is Protecting Your Information
In October, the IRS announced that it has worked with tax industry leaders to test more than 20 new data elements on tax returns that will be used to prevent fraudulent tax returns in 2016. This data will be shared with the IRS and state tax agencies at the time of electronic filing of the tax returns. The new safeguards include the following:
- Reviewing the transmission of tax returns to improve the process. The security summit members will look for many things, including the improper or repetitive use of Internet Protocol numbers, the electronic address where a return originates.
- Examining computer device identification data that is linked to a return’s origin. If queries or submissions come from a device different from what was used originally, this could indicate fraud.
- Checking the amount of time it takes to complete a tax return. The amount of time may be an indicator as to whether computer mechanized fraud is taking place.
- Capturing metadata from the computer transaction. This will allow for a review to look for fraud that is related to identity theft.
To further protect taxpayers from identity theft, tax software providers have agreed to strengthen their validation requirements for new and returning customers. To do so, they must guard against account takeovers by using methods such as requiring stronger passwords.
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