Monday, March 26, 2012

Can the IRS put a stop to Tax Return Fraud?

It seems as though everyday there is another article discussing the hurdles about digitizing common recurring tasks - like filing your taxes. It appears that thieves are filing fraudulent tax returns because of the process the IRS goes through to review a tax return. Click here to read the article on CNN.

Debit cards are a huge problem because they are widely used by legitimate taxpayers who may not have a bank account.
Over one hundred and forty million Americans are filing their returns every year and not every taxpayer has a bank account, so the debit cards that are issued by a third-party provider are a legitimate way for taxpayers to get their refund.

Last year, the IRS reported 938,664 fraudulent returns related to identity theft, totaling $6.5 billion. It appears that there are more folks attempting identity theft. Last year, the IRS identified at least 582,000 taxpayers who were the victims of identity theft, which is more than double the amount from only three years prior.

In testimony before Congress last year, National Taxpayer Advocate Nina Olson said the IRS has implemented a number of filters to catch the fraud, including an electronic marker to mark accounts of verified identity theft victims, an IRS identity theft affidavit form and a standardized list of acceptable documents to substantiate identity theft.

The number of fraudulent returns is having a major impact on other law abiding taxpayers.
The IRS began issuing an Identity Protection Personal Identification Number to victims of identity theft when filing their future returns. What they should be issuing identity theft victims is an automatically changing identity barcode, that changes every minute so if that person was targeted by thieves once, it isn’t likely to happen again because the culprits won’t be able to track that person’s changing barcode. 

It seems the IRS is caught in a bit of a quagmire because they want to get tax refunds into the hands of taxpayers but at the same time they are trying to deal with fraud in crude ways. The way to deal with this kind of fraud is to prevent the thieves from ever gaining access to anyone’s identity in the first place. 

With ePass, our changing barcode technology puts a stop-gap in place that can be used for all taxpayers and not just the ones who have already been victimized. Below is a video endorsement from a retired FBI agent who specialized in bank fraud and has been exposed to a variety of security solutions. Click the play button to watch his testimonial. 

Visit our website to learn more about how our technology can help your organization protect sensitive customer or client information and keep it out of the hands of the ever-growing number of thieves looking to steal from or gain unauthorized access to secure and confidential information. 

Call our Sales Team at (305) 343-7480 to learn more about how ePass can secure all of your electronic transactions. 

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