preventing and detecting identity theft: partnering with the irs to meet the challenge november 13,...
TRANSCRIPT
Preventing and DetectingIdentity Theft:Partnering with the IRSto Meet the Challenge
November 13, 2015
Anita DouglasSenior Stakeholder Liaison
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IRS Strategic Approach
• Prevention
• Detection
• Victim assistance
• Enforcement
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IRS Strategic Approach:Prevention and Detection
• All returns pass through hundreds of filters
• Accelerated return matching information
• Imposed limits on number of direct deposit refunds issued to a single financial account
• Locked deceased taxpayer accounts
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Taxpayer Protection Program
• Letter 4883C: taxpayer must call TPP toll-free number to verify identity
• Letter 5071C: taxpayer should use idverify.irs.gov to verify identity
• Letter 5447C: taxpayer may either call international TPP line or mail verification
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Steps for IDT Victims
• For tax-related victims, IRS requires:
–Complete IRS Form 14039, Identity Theft Affidavit
–Respond immediately to any IRS letters or notices
–Continue to file and pay taxes, even if by paper
• Preparers need power of attorney (Form 2848) and CAF number to complete the form on client’s behalf
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Completing a Form 14039
• Submit only for taxpayers who have suffered a loss of personally identifiable information, such as an SSN
• Check the appropriate box, i.e. Box 1 if the loss of PII is affecting tax administration
• Identity verification required
• Follow submission instructions
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IRS Strategic Approach:Prevention and Detection
• Approved use of information received from local police
• Improved protection for SSN
• Improved procedures to stop prisoner refund fraud
• Partnered with financial institutions and debit card industry
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IRS Strategic Approach:Prevention and Detection
• To prevent IDT from reoccurring, we
–Place indicators on taxpayers’ accounts
–Issue Identity Protection PINs
• Continue testing IP PIN program in Florida, Georgia and District of Columbia
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IRS Strategic Approach:Prevention and Detection
Aggressive efforts yielding results
•2.27 million confirmed IDT returns stopped
•$15.8 billion protected plus $545.6 million refunds returned through partnership with financial institutions
•1,063 new criminal investigations; 748 sentenced
•Data is calendar year 2014
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IRS Summit on IDT
• Recognition that IDT is always evolving
• Pledge to fight a common enemy
• Three working groups looking at:
–Additional steps – especially on technology front
–Short and long-term actions
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IDT: New for 2016
• Improved filters and modeling
• New rules for ITIN users
• Direct deposit limits remain in place
• Mandatory device ID sharing
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Identity Protection PIN
• New number issued before each filing season via CP01A notice
• Currently, no opt-out provision
• Lost IP PINs may be retrieved online
• Replacement IP PINs may be obtained from IDTVA, but subject return to scrutiny
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Future of Victim Assistance
• Methods of protecting taxpayer accounts under on-going review and evaluation
• Movement toward online products, such as an online Form 14039 or Get an IP PIN
• Results of location-specific pilot program being assessed
• Centralization of inventory work underway
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IDT: New for 2016
• Centralization of IDT victim assistance work within Accounts Management
• Reviewing next steps for Identity Protection PINs
• Comprehensive review of EFIN process to help you protect your number
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Partnering with the IRS
• Know your clients; verify their identities
• Don’t use your EFIN to file other preparers’ returns
• Check EFIN numbers weekly
• Notify the IRS if EFIN numbers are too high
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Protecting Taxpayersand Your Business
• Protect taxpayer data and your business from becoming data breach victims
• Review your security arrangements
• Review Publication 4557, Safeguarding Taxpayer Data
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Protecting Taxpayersand Your Business
• Securing taxpayer data is the law
• Make a security plan using best practices
• Data breach? Have a plan
• Contact local IRS stakeholder liaison to notify IRS of data breach
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Protecting Taxpayersand Your Business
• Partner with IRS to share the warnings
• Avoid email/phone scams aimed at you or taxpayers
• Recognize an “account takeover’ attempt
• Urge clients to protect IP PINs, e-File PINs
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Additional Information on IDT
• www.irs.gov/identitytheft
• Pub 4557, Safeguarding Taxpayer Data
• Pub 5027, Identity Theft Information for Taxpayers
• Pub 5199, Tax Preparer Guide to Identity Theft
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W-2 Verification Code Pilot for 2016 Filing Season
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• One in a series of steps to combat ID theft and tax fraud
• Pilot will test capability to verify authenticity of W-2 data filed with federal tax returns in 2016
• IRS will soon name Payroll Service Providers
• PSPs will reach out to some clients
• Algorithm generates alphanumeric codes from selected data fields of the W-2
• Verification codes appear on employees’ W-2s
W-2 Verification Code Pilot
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• Taxpayers enter verification codes on their e-filed federal tax returns
• When processing returns, IRS recalculates codes
• Matching codes = genuine W-2s
• Verification codes not included in W-2 data submitted to SSA, states or local departments of revenue
• Won’t affect state or local tax returns
W-2 Verification Code Pilot
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• We stress:
–Omitting or using incorrect W-2 verification codes will not delay the processing of taxpayers federal tax returns
• “test-and-learn” review after pilot
• If integrity of W-2 information submitted by taxpayers increases, verification codes will remain an element of W-2s in the future
W-2 Verification Code Pilot
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