IRS & Partners Combat Tax-Related Identity Theft What s New for 2016 General Scope of Identity Theft Identity theft costs U.S. victims more than all property crimes combined Identity theft remains number one issue reported to Federal Trade Commission New identity theft victim occurs every two seconds More than 1 billion personal records stolen in 2014 Scope of Tax-Related ID Theft 19 million suspicious returns identified 2011-2014 $63 billion in fraudulent refunds stopped 2011-2014 4.5 million suspicious returns filed through September 2015; 1.2 million confirmed IDT returns filed in that time frame $9.5 billion total confirmed refund fraud protected through September 2015 IRS Efforts Against Tax-Related Identity Theft The IRS has: Increased number of filters to 200 from 11 Limited refunds to a single account Locked nearly 29 million deceased taxpayer accounts Improved cooperation with local law enforcement Worked to reduce internal use of SSNs The IRS has: Reduced prisoner tax fraud Established external leads program with financial institutions Recovered $3 billion in erroneous refunds Helped convict about 2,000 identity thieves in recent years; Criminal Investigation has 1,700 open investigations Curbed EFIN abuse Security Summit Actions for 2016 Agreed on new trusted customer standards for use of tax software o New password standards o Lockout features o Out-of-band features Identified more than 20 new data elements for submission Improved information sharing Testing a W-2 Verification Code
Security Summit Additional Actions Agreed on three new working groups: o Financial Services Work Group will focus on tax-time products such as debit cards o Communications Work Group will work to increase security awareness among taxpayers o Tax Preparers Work Group to bring industry into the dialogue Summit partners reviewing additional steps for 2017 ------------------------------------------------------------------------------------------------------------------- IRS Identity Theft Victim Assistance The Process and the Improvements Tax-Related Identity Theft Three Warning Signs Taxpayer learns of a duplicate SSN either from an IRS notice or e-file return rejects IRS notice about additional tax owed, refund offset or collection action when no return filed Taxpayer receives information from an employer unknown to them Tax-Related Identity Theft Taxpayer Protection Program generates: Letter 4883C for prior-year suspicious returns Letter 5071C for current-year suspicious returns o Most common correspondence o Taxpayer self-verifies at Idverify.IRS.gov Letter 5447C for suspicious returns with foreign addresses Steps for Victims of Tax-Related Identity Theft Complete and file IRS Form 14039 Respond to any IRS letters or notices Continue to pay taxes, even if by paper Place a fraud alert on credit accounts by contacting one of the three main credit bureaus Close any accounts opened by criminals & file a complaint with the FTC Centralizing Victim Assistance Most victim assistance work centralized under one director New Identity Theft Victim Assistance organization created
Policy and operations under one leadership team More consistent treatment for taxpayers Reviewing IDTVA process for improvements About the Identity Protection PIN (IP PIN) Six-digit number that adds an additional layer of protection along with the SSN or ITIN Victims notified once tax-related IDT case resolved Taxpayer will receive a CP01A notice containing a new IP PIN each year Some taxpayers have the option of getting an IP PIN from IRS.gov Enter numbers for all IP PIN holders Recap Victim Assistance Changes We ve centralized most of identity theft victim assistance work We re reviewing victim assistance procedures We re continuing to test the IP PIN in three locations, and We re strengthening verification procedures for Get Transcript and IP PIN ------------------------------------------------------------------------------------------------------------------- Taxes. Security. Together. Tips For Protecting Your Data Online or at Home Additional Safeguards in Place New era of cooperation between IRS, the states and the tax industry produced: New standard procedures for passwords for tax software products New shared data elements from the return to better spot fraudulent returns Improved information sharing to better identify emerging identity theft schemes Standard cybersecurity frameworks Security software Firewall Ant-virus/malware protection File Encryption Look for the s in https web address Create strong passwords Password-protect your wi-fi Be cautious when using public wi-fi Protect Your Information
Back up important files Encrypt copies Store in safe place Properly dispose of old devises Recognize and avoid phishing attempts Never click link embedded in suspicious email Never open attachment in suspicious email Avoid oversharing on social media Beware IRS Impersonation Scams Avoid IRS impersonators; IRS will not: Call demanding tax payment without mailing a notice Threaten to call police Demand payment without opportunity to question or appeal Require a specific payment method Ask for credit or debit card numbers over phone Warning Signs of Identity Theft Not all data breaches result in identity theft and not all is identity theft is tax-related identity theft Warning signs of tax-related identity theft: Notice about a return using your SSN E-file return rejected because of a duplicate SSN Notice about an employer you do not know Steps for Tax-Related IDT Victims Respond immediately to IRS notices File IRS Form 14039, Identity Theft Affidavit Continue to pay and file return, even if by paper Place fraud alert on credit records by contacting one of three major bureaus File complaint with FTC Taxes. Security. Together. New era of cooperation between IRS, states and tax industry Additional changes being made to make tax filing season safer We need your help Protect your personal and financial information online and at home Taxes. Security. Together. We all have a role to play.
Data Theft and Securing Client Tax Information Data Theft The risk is real; preparers are prime targets for identity thieves Cybercriminal tactics constantly evolve Data loss can occur so many ways: o Burglar steals office computers o Cybercriminal breaches your systems using phishing and malware schemes o Disgruntled employees steals client info o Dispose of old devices without erasing data Data Theft Tactics Phishing emails, text or calls o Pose as trusted organizations o Embed links to fake websites o Use malware-infected attachments Risks of opening phishing scams o Account take-overs (Banks, IRS e-services, Tax Software) o Computer breaches Educate employees on scams/risks Protect your EFIN IRS reviewing improvements to EFIN safeguards o Stepped up efforts to expel EFIN abusers; o Increased on-site visits as part of monitoring process EFIN holders should review return numbers during filing season o e-services Account updated weekly o Excessive numbers can be reported to e-help Desk Steps to Protect Client Data Read Publication 4557, Safeguarding Taxpayer Data Review current security measures Create a security plan o Use top-notch software security o Educate all employees o Use strong passwords o Secure Wi-Fi o Encrypt PII emails o Backup files
Plan Ahead for Data Loss Create a reaction plan for data theft o Call IRS Stakeholder Liaison (found on IRS.gov) Review Federal Trade Commission s Business Center to assist businesses with data losses o Notify police o Notify businesses o Notify clients Help Educate Clients IRS, state tax administrators and tax industry working together to increase public awareness about security protections online and at home. Review Publication 4524, Security Awareness for Taxpayers Consider printing and sharing this one-page guide with your clients Summary The risk is real Make a security plan Make a data loss plan Contact Stakeholder Liaison if you experience a data compromise