Fyi

[appelman]

In case you missed this:

http://www.nytimes.com/2012/05/27/us/id-thieves-loot-tax-checks-filing-early-and-often.html?emc=eta1

[FEDUKE404]

NY Times article

You beat me to it!

EXCERPT:

With Personal Data in Hand, Thieves File Early and Often

“The I.R.S. is doing what they can to prevent this, but this is like a tsunami of fraud,” Mr. Ferrer [United States attorney for the Southern District of Florida ] said. “Everywhere I go, every dinner, every function I attend, someone will come up to me and tell me they are a victim — people in this office, police officers, firefighters.”

FE

[John of PA]

I'm sure that many of us has had clients Efile returns rejected becasue of this problem. Good point, it's a tough one for IRS to keep up with.

[Jiggers]

If the IRS knows what is causing the huge theft, based on the article they do, they why don't they get congress to change the specific things that are the problems?

Debit cards, for one.

Social Security Administration releasing SS numbers of deceased persons too soon after death.

[JohnH]

specific things that are the reason for the problem...

3. electronic filing, accompanied by the promise of rapid turaround of refunds as the inducement

[OtisMozzetti]

3. electronic filing, accompanied by the promise of rapid turaround of refunds as the inducement

One of the solutions could be more rapid validation of information documents received by the IRS, with tax refunds held back until information documents are validated.

Another solution could be more thorough documentation of the identity of the persons filing electronically. I once had the experience of a filing putting in for a 3-day refund, but I reported the suspicious W2 to the state tax authorities who replied that it was fraudulent, though the person never came back to receive the check which was to be issued.

[Snaggletooth]

Old Fashioned Audits

What about good ole' fashioned audits to put the fear of God in dead-beats who claim people they shouldn't?

That's too simple, I suppose. Can't think of a thing that would be more effective. Everything else sounds like workarounds to solve the periphery of the problems, when this would stop it cold.

[jimfrombx]

As an amateur genealogist I have been using the SSDI for quite a while and have found
it extremely helpful. Recently, some members of Congress have expressed an interest in eliminating it in order to solve the problem. I would hate to see them do that and make genealogy even more difficult with all the new privacy laws, many which make no sense.
I doubt that by eliminating the SSDI that the fraud will go away. First, how many of your clients that have been victims are still alive? My guess is that the majority of them are and that means SSDI wasn't the problem. If someone on the SSDI had a return filed why can't the IRS delay processing of the return, especially if "they" want their refund on a debit card. Last I heard, you still can't take it with you.
The IRS knows, or should know, when an inividual is deceased and can take what ever additional steps are necessary to ensure fraud is not involved.

[John of PA]

It appears the problem stems from database list floating around with name, addresses and Soc Sec #'s. IRS is fighting the problem by giving taxpayers a special PIN to go on the special line on the 1040 p2 that you probably have seen shaded out. Right now they will only give the PIN to taxpayers who have been victims, I see them issuing one to everyone, which will render these list floating around worthless. It's sad but so far, electronic filing has not saved the US Treasury anything, it has cost them billions in fraud tax returns, we don't even know the extent of the losses.

[taxmom34]

part solution

i think the biggest problem is with the EIC, if congress eliminated that credit and send the people back to local welfare offices and give them help on a weekly basis instead of this yearly jackpot.
i've seen a few (self prepared) that were really entitled but spent it foolishly (like a trip to disney world for a 2 yr old and 4 yr old)

[kpangelinan]

i think the biggest problem is with the EIC, if congress eliminated that credit and send the people back to local welfare offices and give them help on a weekly basis instead of this yearly jackpot.
i've seen a few (self prepared) that were really entitled but spent it foolishly (like a trip to disney world for a 2 yr old and 4 yr old)

I'm with you on this one.....the EIC has got to be the biggest culprit. Would love to see that end and be distributed another way.

[Jiggers]

i think the biggest problem is with the EIC, if congress eliminated that credit and send the people back to local welfare offices and give them help on a weekly basis instead of this yearly jackpot.
i've seen a few (self prepared) that were really entitled but spent it foolishly (like a trip to disney world for a 2 yr old and 4 yr old)

The only problem with sending them to local welfare offices is that those employees can't be trusted. They rubber stamp the applications now. Same with those applying for medicaide benefits for kids with no dads....... Mom and kids live with grandparents who provide everything and yet the mom applies for welfare because she has "no income" except the cash she gets for cleaning houses......

etc., etc., etc.

That is like putting the fox in charge of the hen house.

[JohnH]

Here's an idea. Put the administration of the EIC in the hands of the Social Services offices where it belongs. Then inform the Federal employees they will be fined $500 for each application they approve without using "Due DIligence." Heck, I even have a checklist they can use - it's already been developed by the IRS.

[kpangelinan]

Here's an idea. Put the administration of the EIC in the hands of the Social Services offices where it belongs. Then inform the Federal employees they will be fined $500 for each application they approve without using "Due DIligence." Heck, I even have a checklist they can use - it's already been developed by the IRS.

HAHAHAHAHAHAHA!!!! LOVE IT!