Accounting And Tax Tips

The IRS, condition-tax companies, and private-sector industry leaders today complete their continued progress against tax-related identification theft and ready additional safeguards for the 2018 processing season to suppress refund fraud. The most recent IRS data continuing to show significant improvements as fewer identification theft returns came into the taxes system, fewer fraudulent refunds were fewer and released taxpayers were confirming themselves as victims of identification fraud. “We’ve made tremendous progress since the Security Summit partnership held its first session in 2015,” said IRS Commissioner John Koskinen.

“We’ve seen the number of identity-theft-related tax returns fall by about two-thirds since 2015. This dramatic decrease helped prevent thousands of taxpayers from facing the difficulties of working with identity robbery issues. This shows the unique collaboration between the tax industry, the carrying on states and the IRS. But we’ve a lot more work facing us. Even as we evolve, so do the cybercriminals here and abroad.

“The collaborative work of the Summit is helping states, industry, and the IRS identify deceptive schemes and tax returns earlier,” said Courtney M. Kay-Decker, director of the Iowa Department of Revenue and a consultant of the Federation of Tax Administrators. This is Koskinen’s last Security Summit conference prior to the final end of his term as IRS commissioner in November.

Koskinen convened the various groups collectively for an unprecedented meeting in 2015. This session led to the creation of the Security Summit and a series of initiatives that resulted in greater protections for the taxpayers and the tax system. Since 2015, the IRS has put in place numerous safeguards as the federal, condition, and private industries worked well collectively.

For example, the tax industry shares many important data factors from comes back that help the IRS and claims to identify potential identification theft fraud. Password protocols for both individual and taxes professional software have been enhanced. States has worked with financial institutions to create their own program to help identify believe refunds. The IRS continues to pilot an application W-2 Verification Code that helps confirm income information and employers. “These efforts have made an amazing difference for taxpayers,” Koskinen said.

Confirmed identity robbery returns declined. Financial firms ended suspect refunds. Finance institutions halted 124,000 suspect refunds in 2016, a 50 percent decrease from 2015. Finance institutions have ceased 127, this season 000 suspect refunds so far, which in part reflects a handful of cases involving thousands of accounts. Identity fraud sufferer figures significantly dropped.

The IRS and its own Security Summit partners are already looking at how to refine existing protections and add new ones for the 2018 processing season. For example, Summit companions will be writing more data factors from tax returns than previously. Also for 2018, you will see a fresh “Verification Code” box included on all official Forms W-2 for the very first time.

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Many taxpayers will see a 16-character code on about 66 million Forms W-2 to aid with authenticating the proper execution W-2. Taxpayers preparing their own returns and tax professionals are urged to enter the code if the container contains the 16-digit number. Due to security concerns, not everything the companions do is noticeable to the public or fraudsters. For example, the Summit companions continue to implement information writing in the Identity Theft Tax Refund Fraud Information Sharing and Analysis Center (ISAC) where emerging identity theft strategies and alerts are distributed within the partnership. So far this year, 67 security alerts have been shared through this process already.

The Summit partners also are placing an increased emphasis on identity theft protections for business earnings in the Form 1120 and 1041 series. The IRS will be asking tax experts to assemble more information on the business clients. The info being collected assists the IRS in authenticating that the tax return being submitted is truly a legitimate return filing and not an identity theft return. The name and Social Security quantity of the business person certified to signal the business return. Is the person signing the return authorized to take action?

Payment background – Were estimated tax obligations made? If yes, when were they made, how were they made, and exactly how much was paid? Parent company information – Is there a mother or father company? More information predicated on deductions claimed. Filing history – Has the business filed Form(s) 940, 941, or other business-related tax forms?