CCH Tax Day Report
The IRS held its annual Security Summit on June 28 in Washington, D.C. to review the 2016 successes and finalize its 2017 initiatives. The Security Summit, which is comprised of representatives from the IRS, state agencies and the private-sector tax industry, first met in 2015 seeking to counter increasingly sophisticated criminals that were amassing massive amounts of stolen data and using more elaborate schemes in an effort to defeat efforts to identify fraudulent returns.
IRS Commissioner John Koskinen noted the Summit’s accomplishments had a real and substantial impact on curbing stolen identity refund fraud. “This unique collaboration between the private sector, the states and the IRS has provided new defenses and protections for taxpayers and the tax system,” he said. “We have made significant progress in this effort over the last year, but much more work remains. The Summit group will expand our efforts in the coming year, and we will work hard to take new steps to combat the rapidly evolving identity theft and refund fraud schemes.”
For 2017 the Summit’s priorities remain focused on enhanced authentication procedures, improved information sharing, heightened cybersecurity and greater public education and outreach. 2017 initiatives include:
(1) Expanding a W-2 Verification Code test to cover approximately 50 million forms. Selected forms contain a 16-digit code that taxpayers and tax preparers enter when prompted by software. The code helps validate not only the taxpayer’s identity but also the information on the form. This pilot is among the most visible Summit action for 2017.
(2) Identifying additional data elements from tax returns that will help improve authentication of the taxpayer and identify possible identity theft scams and sharing data elements from corporate tax returns.
(3) Launching the Identity Theft Tax Refund Fraud Information Sharing & Analysis Center (IDTTRF-ISAC). This will serve as the early warning system for partners, collecting and analyzing tax-related identity theft schemes.
(4) Expanding the Security Summit’s “Taxes. Security. Together.” awareness campaign to tax return preparers to ensure they have the information they need to protect themselves from cyberattacks and to safeguard taxpayer data.
(5) Creating a process for financial institutions to identify questionable state tax refunds and return them to states for validation. Twenty-three states have signed on so far.
Finally, to ensure that the Summit’s work will be ongoing, effective July 1, the Summit will work under the auspices of the Electronic Tax Administration Advisory Council (ETAAC.) The ETAAC charter was expanded to identity theft to allow the change.
IRS Commissioner John Koskinen Prepared Remarks: Security Summit Press Briefing
Security Summit Partner Statements – National Association of Tax Professionals
Intuit Applauds Progress Against Tax Refund Fraud; Sees More Work Needed to Win Long-term Fight
Statement of Bill Cobb, H&R Block President & CEO
NBPCA Applauds IRS Security Summit for Reducing Fraud and Risk for Taxpayers