Since 2015, the tax community has been working together to make it harder for identity thieves to file fraudulent returns. While this initiative has been successful to date, identity thieves have responded in kind. They are now increasing their efforts to steal even more data in an attempt to impersonate taxpayers. That’s why, according to the IRS, state and federal tax agencies are enacting a series of new initiatives for 2017.
“Many of the changes will be invisible to taxpayers, but will be invaluable to helping keep you safer from identity thieves,” the IRS stated in a media release. “Our focus is on ‘trusted customer’ features that help us authenticate both the taxpayer and the tax return.”
Here are a few ways the new security safeguards could affect you:
Look For The New Verification Code
Some W-2 forms will have a new 16-character code. This Verification Code will help taxing authorities verify the accuracy of the information being provided on the tax form being submitted. The IRS began testing new W-2 forms with these codes in 2015, an effort that proved successful. As a result, more W-2 forms will utilize these codes in the future.
Prepare To Pull Out Your Driver’s License
Like their federal counterparts, state tax agencies are doing more to verify the identities of taxpayers requesting state refunds. While you don’t need your driver’s license to file a federal tax return, most states will begin asking taxpayers to provide their driver’s license numbers to ensure that the information matches state records.
Expect Minor Delays
If you are claiming the Earned Income Tax Credit or the Additional Child Tax Credit, your refund could be delayed – but not by much. This delay is the result of a law Congress passed that requires the IRS to hold refunds claiming these credits until Feb. 15, which means if you take into consideration the Presidents Day holiday and weekends, some refunds for those filing their returns early could be delayed until the week of Feb. 27.
Identity theft and refund fraud have become prevalent in our society, which is why government agencies are taking proactive measures in an attempt to thwart criminals who use tax season as a quick payday. In addition to the safeguards put in place by the IRS and other government entities, there are a variety of strategies you can do to protect yourself from identity thieves every day. Always keep your computer secure, avoid phishing emails and malware and ramp up your efforts to protect your personal information on and offline.
Don’t Forget About Those Pesky Phone Scams
Don’t forget, fraudsters aren’t only attempting to impersonate taxpayers for a quick payday. Over the last several years, some scammers will attempt to be IRS representatives in an attempt to scare taxpayers into settling a fake debt with the agency. Oftentimes, they will become hostile and threaten to bring in law enforcement. Don’t fall for it.
Remember that if the IRS needs to contact you for anything, their first attempt will always be through official mailed correspondence. They will not contact you out of the blue via email or telephone. In the past, scammers have found success calling up their victims and demanding payment for alleged back taxes. Don’t fall for this trick – even if they do threaten to call in the authorities.
Instead, if you think you might owe taxes or that there may be an issue with your taxes, call the IRS directly at (800) 829-1040. An authorized IRS representative can help you determine if you have a payment due.
And if you do get a suspicious call or email from someone claiming to be from the IRS, report the incident to TIGTA at (800) 366-4484. Also, contact the Federal Trade Commission and use its “FTC Complaint Assistant” at FTC.gov. Add “IRS Telephone Scam” to the comments section of your complaint.
Email Rea & Associates to learn more about the changes taxpayers should be on the lookout for in 2017 and how you can protect yourself from potential tax-related scams.
By Lesley Mast, CPA, MAcc-Taxation (Wooster office)