CCH Tax Day Report
The IRS has posted questions and answers on its website about the Service’s mailings on suspicious activity related to the Data Retrieval Tool (DRT) and Free Application for Federal Student Aid (FAFSA). The IRS reported in March that it had concerns about the security of information on the DRT and took the tool offline (TAXDAY, 2017/03/13, I.3).
Individuals use the DRT to complete the FAFSA. According to the Service, its fraud detectors have stopped “questionable tax returns” by filers who accessed the DRT. Several lawmakers have asked the IRS to brief them about the security concerns and the steps the Service is taking to bring the DRT back online (TAXDAY, 2017/03/23, C.1).
The IRS explained on its website that it is working to identify taxpayers affected by questionable use of the DRT. The Service is sending letters to taxpayers notifying them when it identifies suspicious activity. Notifications are also being sent when the IRS sees indicators of suspicious activity. This does not mean the person is a victim of identity theft, but the IRS wants to take an extra step to alert people that there might be suspicious activity related to their personal information. In addition, the IRS is taking precautionary steps to notify people about potentially suspicious activity on the FAFSA that involved the DRT.
Finally, the IRS noted that if there is an issue with a taxpayer’s return or refund, it will contact the taxpayer by mail with specific details and instructions. The IRS will take an extra precautionary step and mark their account to protect the taxpayer from possible identity theft.
Questions and Answers: Mailings about suspicious activity related to the DRT and FAFSA