A new initiative that unites the IRS, state authorities and the tax preparation industry in preventing identity theft will hopefully safeguard taxpayers against fraud—but it might mean delays in receiving refunds.
In an effort to prevent fraudulent tax returns filed by identity thieves, the Security Summit Initiative will put additional security measures in place.
From NBC News:
People don’t know they’ve been victimized until they file their return and it’s rejected – because the IRS computers only accept one filing per Social Security number. Dealing with all the paperwork involved to prove you were victimized can slow down your return by months.
Identity thieves have been quite successful at fooling the IRS and state taxing authorities in recent years. The IRS reported that in 2013, it paid out $5.8 billion in fraudulent refunds to identity thieves.
Preventing this fraud is now a top priority at the IRS because the phony tax returns are pouring in. In the first 11 months of last year, the agency stopped payment on 1.4 million returns that were filed by identity thieves attempting to claim refunds of $8 billion.
New safeguards put in place as a result of the security summit in March 2015 include industry-wide standards for passwords, account validation and information sharing to help spot and stop fraud.
Although the IRS estimates that it will be able to process nine out of ten claims within to 21 days, the National Taxpayer Advocate at the IRS said in a report to Congress earlier this month that the new security protections slowed the process considerably last year, NBC News points out.
Photo by 401(K) 2012 via Flickr CC License.
