Rejected - Identity Theft?

[mastertaxguy]

Liberty tax, drake and id theft

1. Married tp arrived for tax prep.
2. Spouse filed mfs w/area liberty tax office.
3. Tp brings spouse's mfs liberty tax folder. We all know what these look like: 11"x17" with the liberty tax name printed; return info and cl docs sort of stapled to the folder.
4. Top page of the client copy of the return more or less stapled to the 'folder' is a letter type format liberty document addressed to the taxpayer (our tp's spouse) with his full name, full address, and social security number in full. Same information for the non-filing spouse: Her name, address and her social security number.
5. We called our software provider drake and asked if there was a way to only print last four numbers of soc. Security numbers on client copies of documents, inlcuding the paper copies of returns for client files: They said no easy way.
6. And some wonder why there is so much i.d. Theft....

[FEDUKE404]

Masking SSNs on client copy

1. Married tp arrived for tax prep.
2. Spouse filed mfs w/area liberty tax office.
3. Tp brings spouse's mfs liberty tax folder. We all know what these look like: 11"x17" with the liberty tax name printed; return info and cl docs sort of stapled to the folder.
4. Top page of the client copy of the return more or less stapled to the 'folder' is a letter type format liberty document addressed to the taxpayer (our tp's spouse) with his full name, full address, and social security number in full. Same information for the non-filing spouse: Her name, address and her social security number.
5. We called our software provider drake and asked if there was a way to only print last four numbers of soc. Security numbers on client copies of documents, inlcuding the paper copies of returns for client files: They said no easy way.
6. And some wonder why there is so much i.d. Theft....

For the past several years I have routinely printed on all "client copies" of the tax returns the relevant Social Security numbers in the format ***-**-1234 for the taxpayer, the spouse of the taxpayer, and any dependents of the taxpayer. The masking is done on the federal return, as well as on all state returns. Even the direct-deposit bank account information is masked in a similar way.

There is a simple box to check, on the print screen, that makes the optional change. "Mask private data on Fed/State copies" or something similar.

Surely Drake tax software can handle that simple option ? ? ?

FE

[abby]

several this year

We've had several this year, and have only had one before - a couple of years ago. Every one of them can be traced to the Seattle and Portland Diocese security break where volunteer information was stolen. Since volunteers need to have background checks, they had to provide SSNs.

But, we also saw our first occurrence of a client on extension getting the letter saying the return was being held and asking for more information. That's the only encouragement we've seen so far; there is an effort to identify returns that have something off and hold them for further inquiry.

We electronically extended all unfiled returns this year, even those for clients filing with non-electronic extension payments, just to see if we'd get any rejections. We didn't, so we don't know for certain if that will work as an 'early alert' system.

[mastertaxguy]

Drake Software ID Theft Issues

For the past several years I have routinely printed on all "client copies" of the tax returns the relevant Social Security numbers in the format ***-**-1234 for the taxpayer, the spouse of the taxpayer, and any dependents of the taxpayer. The masking is done on the federal return, as well as on all state returns. Even the direct-deposit bank account information is masked in a similar way.

There is a simple box to check, on the print screen, that makes the optional change. "Mask private data on Fed/State copies" or something similar.

Surely Drake tax software can handle that simple option ? ? ?

FE

While I agree with your assessment, friend, there is no "check the box" option on Drake Tax Prep Software to do what we all seem to agree is a major ID theft prevention issue.

Alas, maybe someone in Franklin NC reads these blogs. Then again, Maybe not.

[joanmcq]

ATX has the option & all SSNs & bank info is masked. I do wish the last 4 printed out so the client could check the data in case I screw up, but most really like the feature. I didn't mask in 2012 because the printing was so screwed up that year and a few asked me to go back to masking.

[FEDUKE404]

Drake software

While I agree with your assessment, friend, there is no "check the box" option on Drake Tax Prep Software to do what we all seem to agree is a major ID theft prevention issue.

Alas, maybe someone in Franklin NC reads these blogs. Then again, Maybe not.

Since I've never been associated with Drake software, I cannot address your observation. I do find the apparent Drake omission somewhat surprising....from what I've read on these boards many Drake users place the quality of their (expensive!) software far above that of most other vendors.

All I know is the masking option has been available for some time with MY tax software. It would seem like a reasonable (default) setting, aside from the overall ID theft issues. Many/most Forms 1099 are now being routinely issued in a similar masked format, and I imagine that practice will grow in overall use in the future. Why would anyone want to risk generating documents with full information shown when there is absolutely no need to do such?

But I've long ago learned "why?" is not a good question to pose on these boards.

FE

[David1980]

Many/most Forms 1099 are now being routinely issued in a similar masked format,

Yeah. I'm not a huge fan of that though. While it doesn't matter for the IRS, some states want the EIN entered when there's a 1099-MISC if you want to e-file. Perhaps only when state tax is withheld, but still. I saw a California 593 this year with the EIN masked. That return couldn't be e-filed as a result.

[Gary2]

Yeah. I'm not a huge fan of that though. While it doesn't matter for the IRS, some states want the EIN entered when there's a 1099-MISC if you want to e-file. Perhaps only when state tax is withheld, but still. I saw a California 593 this year with the EIN masked. That return couldn't be e-filed as a result.

I thought that only the recipient's SSN was allowed to be masked, but the issuer's EIN had to be provided in full. Is that wrong, or was the issuer wrong in blanking out the EIN?

[Gary2]

As for the SSNs on the client copies, I really don't see that as being a significant source of identity theft, other than the ones retrieved from the trash barrel outside the office.

Most cases of identity theft seem to be stealing info for large numbers of people. Burglars generally don't waste time going through file cabinets in private homes looking for documents, just to be able to steal a handful of identities.

[David1980]

I thought that only the recipient's SSN was allowed to be masked, but the issuer's EIN had to be provided in full. Is that wrong, or was the issuer wrong in blanking out the EIN?

I would imagine the issuer was wrong in blanking out the EIN considering it was needed for e-filing the California return. It was most likely the case of someone going too extreme with identity theft protection. I would imagine the copy they sent to the state had the EIN just the client copy didn't. But since the client wants to get credit for the tax withheld the sort of need the EIN, oh well.

[FEDUKE404]

CA issues again

Yeah. I'm not a huge fan of that though. [color-blue]While it doesn't matter for the IRS[/color], some states want the EIN entered when there's a 1099-MISC if you want to e-file. Perhaps only when state tax is withheld, but still. I saw a California 593 this year with the EIN masked. That return couldn't be e-filed as a result.

One would think the client/preparer could obtain the CA full EIN with minimal effort, and then successfully efile. After all, what is written on the paper document is a separate issue from the complete information provided with any efiled return. For that matter, an efiled federal return will generally be rejected if the EIN (for W2s at least) is either absent or does match the data on file with the IRS data base.

Having said that, I doubt if the issuer of the Form 1099-MISC followed proper procedure by masking that number.

FE

[oceanlovin'ea]

Master tax guy

Yes, Master tax guy, I had one client this year that got a letter from IRS before I had even finished preparing the return. The letter was to the spouse and another person's name but with her address. It said that it was being reviewed.
Client's daughter called me and I picked up letter, got her POA and then came home and called IRS. I talked to the most awesome lady. She looked at the return that had been filed and said that it was definitely a "fantasyland return". She went in and checked and the refund had already been sent. She got so upset. Said if they put safeguards in to protect why are they in such a hurry to get the refunds out. But she made excellent notes on file. She was going to be talking to people about this stuff happening. She was going to raise some cane!!
I just loved that I found a passionate rep who cared about what is happening.

Still had to file paper return and will have to wait for refund to come. Fortunate thing was that they didn't have any current year withholding. They had used last year's refund to apply to this year. So rep said it was still sitting in their account.

But how stupid was that guy??????? Put her name and his name and her address on the return! any correspondence would go to her address. He wasn't the smartest thief....but then he did get some money.

Linda, EA

[manyhappyreturns]

Masking of SSNs

As for the SSNs on the client copies, I really don't see that as being a significant source of identity theft, other than the ones retrieved from the trash barrel outside the office.

Most cases of identity theft seem to be stealing info for large numbers of people. Burglars generally don't waste time going through file cabinets in private homes looking for documents, just to be able to steal a handful of identities.

Clients are oftentimes quite careless with where they put their tax return copies. Some of them leave them in the car, sometimes overnight, and sometimes longer because they keep forgetting to take the dang thing into the house. One elderly lady couple of years ago set hers on top of her car while she unlocked the door, then drove away. She came back in the next day to tell me I didn't give her the papers, and I was sure I did, but I made her more copies because she needed them for something. Meanwhile it had been pouring down rain outside for a couple of hours, but after she left, I couldn't help but take a look outside to see if those earlier papers hadn't quite made it to the car. Lo and behold, her tax folder was in the bushes and soaking wet right by where she had parked the day before.

Also, I have a lot of out-of-town clients and I mail them their papers, so that to me is a concern regarding masking SSNs. I used Drake this year and last, and at least the SSNs on their organizers are masked, and of course the bulk of those are mailed.