Thanks to Jon Hayes of the Independent Accountants Association of Michigan for this update re IRS efforts to help combat identity theft and tax refund theft problems within the IRS eas
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With identity theft on the rise and criticism that they aren’t doing enough to help taxpayers combat it, the Taxpayer Protection division of the IRS has implemented several programs in an effort to reduce fraudulent refunds from being issued.
One service in particular, the Identity Verification Service, is the Service’s response to stepped-up assistance.
When a questionable return has been filed, some taxpayers receive Letter 4883C or Letter 5071C within a week of filing their return, which asks them to verify their identity. The letter also asks them to visit the IRS’ Identity Verification Service, which is powered by third-party resources, Lexis Nexis and Equifax.
The Identity Verification Service then asks “out-of-wallet” multiple-choice questions generated by an independent, secure identity assurance service to verify the taxpayer’s identity. Only the information of taxpayers who received the letter has been uploaded to the Identity Verification Service.
The Taxpayer Protection division believes using this service has been a success and hopes to use it more in the future when it comes to verifying the validity of questionable tax refund claims.