Tax Tips (and other stuff)
First off, let me assure you that the IRS is on it. Does that comfort you?
As of March 2, the IRS reported it identified nearly 1.1 million tax returns with refunds totaling about $6.3 billion for additional review because of the identity theft filters they have recently employed. They were able to determine that 12,617 of those returns were fraudulent and prevented issuance of $105.3 million in fraudulent refunds.
The IRS claims that they have employed 236 special software filters to identify potential ID theft tax returns. That is an increase of 68 additional filters over the same period a year ago. These filters incorporate criteria based on characteristics of confirmed ID fraudulent tax returns in prior years, including amounts claimed for income and withholding, filing requirements, prisoner status, taxpayer age, and filing history.
Tax returns flagged by these filters are held during processing until the IRS can verify the taxpayer’s identity. If their identity can’t be confirmed, the IRS removed the tax return from processing to prevent the possible issuance of a fraudulent refund.
Have you filed a tax return and never got your refund? Perhaps your return was deleted by the IRS because they thought you filed a fraudulent return. Now isn’t that comforting. You properly file your return on time and the IRS decided your identity couldn’t be verified, so they deleted your return. Once again, I ask, “Does the IRS actions to prevent tax identity theft comfort you?”
Now in the IRS defense, they have stepped up efforts that include stopping fraudulent tax returns from being filed on behalf of deceased people and prisoners. As of Jan. 20, 2023, the IRS locked accounts of 52.5 million dead people. When tax accounts are locked, e-filed tax returns are rejected, and paper tax returns are prevented from being posted to the IRS Master File.
Now when the IRS determines your tax ID has been used in a fraudulent manner, they issue a Taxpayer Identification Number to be used to file all future tax returns. This IP PIN will be issued every year, so you can’t use the same IP PIN from a prior year to file a current year return. Currently, the IRS reports that there are 802,449 IP PINs issued for the 2022 tax filing season.
You can request to receive an IP PIN even if the IRS hasn’t tagged your tax ID as being compromised. Go to www.irs.gov, type in “Get an IP PIN” in the search field, follow the directions from there.
There you have it. The IRS is trying hard to stop tax ID thieves. Does that comfort you? Do you think they could be doing more? Pass your thoughts along to the IRS. They are open to ideas.
Have you heard? Proverbs 1:33 says, “But whoever listens to me will dwell securely, and will be at ease, without fear of harm.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. On the web at BullisAndCo.com. Also on Facebook.