IRS Commissioner John Koskinen recently announced that a combined effort between the IRS, state tax authorities and tax return software companies should be in place to combat stolen identity return fraud (SIRF) for the 2016 filing season. The Commissioner organized a summit in March 2015 that set up working groups of tax return software companies and government authorities to come up with ways to fight SIRF. The commissioner’s announcement comes on the heels of the recent “Get Transcript” hack, in which 104,000 taxpayer transcripts were stolen by hackers.
The working groups will review tax return transmissions for several identifiers of fraud. For example, the groups will look for multiple tax return transmissions from the same Internet protocol address, often an indicator that multiple fraudulent returns were submitted. Additionally, the groups will review computer device identification data of the computer submitting the return and the time taken to complete the return. The working groups are considering establishing a Refund Fraud Information Sharing and Assessment Center to assist law enforcement agencies with their SIRF investigations and prosecutions.
Koskinen made clear that he doesn’t expect to facilitate the collaborative effort through new regulations and that taxpayers should not expect any significant changes in the upcoming filing season. The IRS has already made strides in combating identify fraud, having stopped 700,000 more suspicious returns last filing season than previously. The commissioner hinted that efforts to combat SIRF may be hindered should Congress follow through on a proposed 8% IRS budget cut.
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