There are already a number of safeguards in place with the IRS when it comes to protecting our personally identifying information. However, now that we are entering the last few weeks of the year, many of us are already gather our year-end tax data. We should be aware of some of the new measures put in place by the Internal Revenue Service so that we can know what to expect in terms of filing and receiving our 2016 refunds (where applicable).
IRS and Security Summit Partners Urge Taxpayers to Take Immediate Safeguards
Just last week, the IRS and Security Summit partners suggested taxpayers take immediate steps to protect their personal data. Additionally, the IRS just released information regarding delayed tax processing this coming tax season as a result of new security measures. For some taxpayers, refunds will be held until mid-February. The IRS will be implementing safeguards which effect early filers who claim the Earned Income Tax Credit or the Additional Child Tax Credit. This comes as part of a week-long effort by the IRS and the Summit to raise awareness for taxpayers and tax professionals about security threats.
More Safeguards Planned for 2017
New safeguards for 2017 will help confirm the identity of taxpayers. These steps include:
- Providing information to strengthen the process that shows a tax return is authentic. It helps identify that a return is filed by a real taxpayer.
- The tax industry will share information that extends more identity theft protections. These apply to both individuals and businesses who file returns.
- More than 20 states are working together to create a program that flags suspicious refunds. They are trying to stop suspicious refunds before being deposited into accounts.
- The Form W-2 Verification Code initiative will expand in 2017. The initiative is going from 2 million forms in 2016 to 50 million this coming tax season.
- Improved software. The industry continues improving software password requirements. They now add more safety before filing.
New Identity Theft Tax Refund Fraud Information Sharing and Analysis Center
Also known as ISAC, this program will launch in 2017. It serves as an early warning system of sorts. It works by identifying ID theft scams early, and quickly shares that information with participating partners.
Past Successes Against Identity Theft
In 2016, the Summit helped protect against identity theft in a number of ways. The number of taxpayers who reported ID theft on tax returns dropped more than 50%. There were almost 300,000 fewer victims in 2016 than the previous year. Overall this means fewer bad returns, fewer bad refunds, and fewer taxpayers being victimized.
Security Reminders for Taxpayers
The IRS reminds taxpayers they can do their part to help put in place safeguards that will protect their personal information. Taxpayers and tax professionals should:
- Use security software. This means having firewall and anti-virus protections on your software. Make sure the security software is always on and can update automatically. Encrypt sensitive files (like your tax records) that you store on your computer. Also, although it sounds like a no-brainer, use a strong password. Skip password1234 or your birth date. They are not good passwords.
- Learn to recognize phishing emails. Some of the emails look just like legitimate business sites. Common phishing scams trick victims into giving account information and sometimes pose as Amazon, eBay or PayPal. Clicking links directly from email will direct you to a page that looks identical to the merchant site. Avoid clicking links added directly to your email. Instead, visit the site directly to check account details or for problems with account information. If the actual site does not show any account issues or verification requested, the email you received is likely a scam.
- Protect your personal data. Don’t carry your social security card in your wallet or purse, and make sure tax records are secure. Treat your personal information like you do your cash–don’t leave any of it just lying around.
More Information and Identity Protection Measures
For more information about safeguards and the partnership between the IRS and the Security Summit, click here. The IRS is constantly working on ways to help protect your personal information. Almost daily new scams are evolving, but with a vast series of partnerships the IRS is working to eradicate them quickly. Each year, the IRS improves efforts to protect legitimate taxpayers and businesses from falling prey to scams. We want our clients to know that we take the utmost care to protect their personal information. You can rest assured that all identifying information is absolutely safe with us!