The Fight to Protect Your Identity at Tax Time

Income tax fraud, identity theft, and data breaches place a burden on their victims and present a challenge to businesses, organizations, and government agencies. As a result, the IRS, states, and tax preparers, including Kruggel Lawton, are all working together to combat these crimes with aggressive security strategies that protect taxpayers.

This year the IRS is requiring additional data when e-filing individual and business tax returns. Don’t be surprised when your tax preparer asks for the following:

Business returns

1. Number of Forms W-2 if claiming salaries and wages
2. Signing officer Social Security Number

Individual returns

1. Taxpayer and spouse driver’s license or state issued ID number, along with
   • the state that issued it
   • the issue date
   • the expiration date

Departments of revenue around the country are implementing programs to protect their residents. In Indiana, for example, the DOR has implemented their Identity Protection Program. This program is designed to not only stop fraud, but to deter fraud in the state of Indiana. They use the automated identity verification services of LexisNexis to help confirm the identities of all Hoosier taxpayers due a refund in 2017. Identity information from individual income tax returns is checked against the LexisNexis identity verification database. This database confirms that the person submitting the return is who they say they are. Approximately 95 percent of all taxpayer returns are confirmed and moved into processing at this step.

Michigan and Indiana will both implement an Identity Confirmation Quiz. In Indiana, it’s expected that about five percent of taxpayers will be randomly selected to take the quiz. It contains three to four questions for which only the taxpayer would know the answer. After successful completion of the quiz, the taxpayer’s refund is released for processing. More information about each state’s Identity Confirmation Quiz can be found using these links: Indiana  Michigan

These increased security features are designed to prevent identity theft and tax fraud, saving taxpayers and states millions of dollars.