As tax identity theft and fraud continue to spiral upwards, the IRS and key industry players are trying to develop new technolgies and techniques to slow the swindle juggernaught down.
The IRS this week updated the community about what work has been done by its collarborative group of chief executive officers and private sector firms such as H&R Block and Intuit since March when it formed the group to bolster protections against identity theft refund fraud for the 2016 tax season.
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According to the IRS the “Security Summit” group has come up with 20 new data elements that will be added to tax return submissions that will be shared with the IRS and the states to help detect and prevent identity-theft related filings.
In addition, the software industry is putting in place enhanced identity requirements and validation procedures for their customers to protect accounts from identity thieves, the IRS stated.
Specifically some of these elements include:
- Reviewing the transmission of the tax return, including the improper and/or repetitive use of Internet Protocol numbers, the Internet ‘address’ from which the return is originating.
- Reviewing computer device identification data tied to the return’s origin.
- Reviewing the time it takes to complete a tax return, so computer mechanized fraud can be detected.
- Capturing metadata in the computer transaction that will allow review for identity theft related fraud.
- New password standards to access tax software will require a minimum of eight characters with upper case, lower case, alpha, numerical and special characters.
- A new timed lockout feature and limited unsuccessful log-in attempts.
- The addition of three security questions.
- Out-of-band verification for email addresses, which is sending an email or text to the customer with a PIN – a common practice used throughout the financial sector.
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