The IRS, in conjunction with states and stakeholders in the tax preparation and software industry, intends to take additional steps to protect taxpayers from tax-related identity theft, the agency announced at the 2016 Security Summit. "The IRS is expanding its efforts to collaborate with a group that is absolutely critical to the tax system: the tax return preparer community," Commissioner John Koskinen told reporters following the 2016 Security Summit.
The IRS and stakeholders are putting new safeguards in place to prevent identity theft. These safeguards will require all individual taxpayers to update their credentials to a minimum eight-digit password and establish security questions. The IRS with its stakeholders will continue the "Taxes. Security. Together" public education campaign. The IRS is also expanding its W-2 Verification Code test, which helps to validate the taxpayer's identity.
The IRS will receive new data elements from individual returns that will help improve authentication of the taxpayer and identify possible criminal activity. In addition, the IRS plans to create a new Identity Theft Tax Refund Fraud Information Sharing and Analysis Center in 2017.
If you have any questions about tax-related identity theft prevention, please contact your tax advisor or Roy Kramer, Partner, Tax Services, at 314.983.1265 or rkramer@bswllc.com.
