Earlier W-2s could improve identity theft detection at IRS

The IRS usually issues refunds in April each year, months before employers provide wage information forms. About 70 percent of the nation’s taxpayers are eligible for IRS Free File. Taxpayers usually receive prior notification of IRS enforcement action involving IRS tax liens or levies. I have plenty of time before tax day. Often, the victim is unaware that the theft has happened until the person files his or her return and only then discovers that a fraudulent return had already been filed and the refund sent to the thief. This can occur when the perpetrator uses a stolen Social Security number to file a tax return claiming a fraudulent refund.

In addition, users can use the app to find free tax preparation help, make a payment, watch the IRS YouTube channel, get the latest IRS news, and subscribe to filing season updates and tax tips.

CBS MoneyWatch reports, however, that this effort against identity theft and fraud will mean “more stringent passwords to access tax software” and security questions for taxpayers. So after years of the IRS telling taxpayers that the IRS does not initiate contact with taxpayers by telephone and that therefore if someone calls you, attempting to collect money for the IRS it is a scam; now taxpayers will be receiving calls on behalf of the IRS attempting to collect overdue taxes. “We expect the level of service on the phone will be better than a year ago”, he said.

Yet the highest earners are more likely to be audited than everyone else. Using private collection agencies to collect taxes on behalf of the IRS had been done twice in the past and according to Nina Olson, the National Taxpayer Advocate at the IRS, “Twice the experiment ended in failure”. While the Affordable Care Act imposed penalties for those without having qualifying health care coverage, the penalties were rather small initially.

Do you want more bad news? And in October 2015, the Wall Street Journal reported that the IRS has a new program where they can automatically exchange digital financial account information with tax authorities in other countries.

A report on IRS identity theft protections by the Treasury Inspector General for Tax Administration was publicly released today, revealing that an estimated 2.2 million tax returns were not entered into a key system used in fraud detection.

“So far this year it has found another $11 million. It’s easier. The money is just as good as drugs or narcotics, or trafficking”, said Thompson. Corporations must file their tax returns by March 15, and individuals must file their tax returns by April 18.