Koskinen meets with heads software vendors re: ID theft

[jklcpa]

Some of the highlights are below from a two-page article in today's Accounting Today.  Notice that in the list of attendees there is no one from CCH. That's really very disappointing.

 

"Internal Revenue Service Commissioner John Koskinen met with the heads of some of the major tax software companies, tax preparation chains, state tax commissioners and other officials in an effort to combat the growing problem of identity theft and tax fraud.

 

The group included H&R Block president and CEO Bill Cobb; Intuit president and CEO Brad Smith; Liberty Tax Service president and CEO John Hewitt; Thomson Reuters Tax & Accounting managing director of the professional segment Jon Baron; Rhode Island Tax Administrator David Sullivan, who is also president of the Federation of Tax Administrators; Drake Tax Software CEO Phil Drake; FileYourTaxes.com CEO Timur Taluy; and Green Dot CEO Steve Streit. Representatives from the Free File Alliance and CERCA, the Council for Electronic Revenue Enhancement, were also in attendance."

 

They agreed to form three working groups—overview, technology and information sharing—to work on issues such as taxpayer authentication, identity theft prevention and analysis."

 

We've been concerned for years...plan to take additional steps...two-hr meeting exchanging views....

 

"The three working groups will build on the work that’s been done in the past by the IRS, state tax administrators and technology companies. They plan to focus on steps that can be implemented for next filing season and hope to come up with recommendations by this summer to give tax software companies and preparers time to adjust their systems."

 

There's talk of trying to utilize direct download of W-2 data directly from software vendors as an added security measure in taxpayer identification, the IRS receiving W-2 information earlier in the season and verifying that first, and slowing down refunds or refunding money later in the year.

 

The article goes on to talk about tax preparer training and that the IRS will be asking Congress to give IRS authority to require a minimum of training for tax preparers. It also mentions the use of debit cards for issuing refunds, and that it will be making changes so that the IRS system will differentiate between refunds issued via direct deposit to bank accounts and those issues on debit cards.

 

 

[Abby Normal]

I'm just glad this commissioner is going after these frauds. It's way past due.

[Gail in Virginia]

But I am not sure what tax preparer training has to do with this.  I don't think the problem is honest mistakes by preparers who don't know any better and can be trained to not make the mistakes.  The problem is intentional FRAUD. 

[FreedomTaxed]

TP training has nothing to do with anything, Gail, as I'm sure you know. The IRS refuses to put PTINs on hold at the efile level when algorithmic examination amply demonstrates that certain PTINs are producing a string of questionable returns; the held PTIN would automatically cause a rejection at the efile level, and that PTIN remains on hold until some sort of phone-based procedure is followed... like calling the IRS Office of Tax Preparers and having an IRS employee simply review a randomly selected questionable filing (previously accepted be efile) and giving the preparer a Pass/Fail rating. If the preparer satisfies the IRS employee that he can justify the return, then the preparer Passes and the hold is lifted. If the preparer Fails, then the hold remains, and the preparer has to go to an IRS office and essentially appeal the hold, which is a more thorough review of a randomly selected questionable filing, or two, and if that also Fails, then the PTIN is defunct for the rest of the year.

 

Obviously this isn't too difficult to arrange, is "fault tolerant", and it highly motivates preparers to keep their noses clean or they'll lose the PTIN for the rest of the year. Since the supply of PTINs during tax season is limited, this should be a workable system.

[joanmcq]

There's fraud at the preparer level, and fraud using DIY software. Each type of fraud requires a different approach to stopping it; although earlier matching of W2s can stop a lot of it.

[jklcpa]

^ that, exactly.  There is much more to the article than I posted. My post was only some of the highlights it.

[Jack from Ohio]

And removing the insatiable need of Americans to get their refund RIGHT NOW!!!  This is the driving factor for the way the system is structured.  Thereby giving the fraudsters free reign.

 

Comes down to greed by the average American citizen, and the disease of INTENTIONAL APATHETIC IGNORANCE.

[cred65]

When Graft, Avarice(SP), & Greed (GAG) are the prevailing themes of our leaders(?), the minions will follow.

"HE MADE ME DO IT"

[kcjenkins]

And removing the insatiable need of Americans to get their refund RIGHT NOW!!!  This is the driving factor for the way the system is structured.  Thereby giving the fraudsters free reign.

 

Comes down to greed by the average American citizen, and the disease of INTENTIONAL APATHETIC IGNORANCE.

And greatly enhanced by the Congress [all of them, all parties] using the tax code to try to administer welfare programs, social engineering, even environmental programs.