ProSeries 2015 dirvers license info

[FEDUKE404]

Mountains from molehills cont'd

The previous commenter was correct, an ID value that one can't change (SSN, DL, DOB, etc) is never a good security secret. Haven't we learned anything from the problem of using SSNs? Asking for DL and issue date is meaningless busywork, I'm not doing it for free.

Second, what about the large class of taxpayers who report a balance due? Are we really worried about fraud on their part? Why should they have to provide any ID info at all? (Of course, it's possible someone could fraudulently target a taxpayer by filing a huge balance due return, so that the target gets harassed by the IRS collection process until they get the correct return filed instead).

Let me guess. . .

You charge extra to obtain RTN / DAN for direct deposit of refunds ? (Doubt if you even bother with direct debits.)

You charge extra to enter PIN that IRS has provided to taxpayer ?

You charge extra to change a mail address, or a daytime contact telephone number (or is that just left blank) ?

You charge extra to change last name of someone with recent marriage / divorce ?

Reminds me of my lawyer. . . .

BTW: As for "worry" about client with a balance due return, did it ever occur to you that part of the problem is someone (else) is frequently filing refund returns before a legitimate state return is ever filed?

My sole exposure to this issue is preparation of Virginia resident returns. I ask for last five digits of VA drivers license as requested. I think it's an excellent "easy" step to prevent potential client problems. It takes less keystrokes than entering bank refund information. And. . .I do it for gratis !!

Different strokes for different folks, I guess.

FE

[TAXNJ]

Now

Let me guess. . .

You charge extra to obtain RTN / DAN for direct deposit of refunds ? (Doubt if you even bother with direct debits.)

You charge extra to enter PIN that IRS has provided to taxpayer ?

You charge extra to change a mail address, or a daytime contact telephone number (or is that just left blank) ?

You charge extra to change last name of someone with recent marriage / divorce ?

Reminds me of my lawyer. . . .

BTW: As for "worry" about client with a balance due return, did it ever occur to you that part of the problem is someone (else) is frequently filing refund returns before a legitimate state return is ever filed?

My sole exposure to this issue is preparation of Virginia resident returns. I ask for last five digits of VA drivers license as requested. I think it's an excellent "easy" step to prevent potential client problems. It takes less keystrokes than entering bank refund information. And. . .I do it for gratis !!

Different strokes for different folks, I guess.

FE

Now let's be fair. Everyone's fees are different in the free market place and the consumer has the right to choose. Right now this issue is "optional" for one to decide if to include, but it is good practice to verify and/or copy/scan a clients ID.

Wonder why you are using an expensive lawyer and if that lawyer is spending that extra money on something fun on a Sunday or deciding if a driver ID goes on a tax return?

[kathyc2]

I think the W-2 verification codes and the DL information without tracking the verification back to anything is just a bunch of silly extra data entry.

I don't think any professional software will allow a person to put through a return without a valid EFIN, so because it can be tracked back to the preparer, I doubt many if any of the fraudulent returns are coming from people like us.

From my understanding the vast majority is coming from on-line services such as TurboTax and bank product companies. Put the responsibility on them to know the customers they are dealing with or receive a fine and leave the rest of us alone from mandates. If a company knows they will be fined for letting through a fraudulent return you can be sure they will come up with a way to prevent it and most likely it will be more effective than anything Internal Revenue Service comes up with.

[FEDUKE404]

Source of problem returns

. . .
From my understanding the vast majority is coming from on-line services such as TurboTax and bank product companies. Put the responsibility on them to know the customers they are dealing with or receive a fine and leave the rest of us alone from mandates. If a company knows they will be fined for letting through a fraudulent return you can be sure they will come up with a way to prevent it and most likely it will be more effective than anything Internal Revenue Service comes up with.

Agree on that! Too bad the folks at the IRS didn't follow your logic before coming up with Form 8867 and related issues.

OTOH, I don't miss preparing EITC returns one bit! Block, JH, Liberty et al are more than welcome to that market.

FE

[taxmandan]

I think the W-2 verification codes and the DL information without tracking the verification back to anything is just a bunch of silly extra data entry.

I don't think any professional software will allow a person to put through a return without a valid EFIN, so because it can be tracked back to the preparer, I doubt many if any of the fraudulent returns are coming from people like us.

From my understanding the vast majority is coming from on-line services such as TurboTax and bank product companies. Put the responsibility on them to know the customers they are dealing with or receive a fine and leave the rest of us alone from mandates. If a company knows they will be fined for letting through a fraudulent return you can be sure they will come up with a way to prevent it and most likely it will be more effective than anything Internal Revenue Service comes up with.

One of the important takeaways from the meeting was that we need to monitor our EFIN filing records. The thieves are using real EFINs to efile and EROs need to frequently check their numbers with theIRS. If you have filed 200 returns to date and your ERO record shows 950 returns, your EFIN is compromised and being used by thieves. TheIRS says to notify them immediately and they can suspend your EFIN and issue you a new number to use right away. Hopefully the software companies are prepared to change EFINs quickly so there isn't much delay for us to continue filing.

I do support the idea of the W-2 code and participation of the payroll companies to file the W-2 with theIRS so verification can be done before refunds are issued. Refunds should not be issued until the income and withholding has been verified by theIRS. That's where they need to focus efforts to prevent fraud. Be proactive, not reactive and we can beat this thing.

[taxmandan]

So there's basically scenarios where a thief has the social security number, the driver's license ID, or both. I would bet in most cases they do not have both however, in which case including driver's license number in return data might do a lot to cut down on identity theft. It all depends on the nature of how that identity was compromised.

This idea WILL give them both, theIRS has been hacked, OPM has been hacked, and some Oregon departments have been hacked. This idea just consolidates the clients information for the taking.

[kathyc2]

One of the important takeaways from the meeting was that we need to monitor our EFIN filing records. The thieves are using real EFINs to efile and EROs need to frequently check their numbers with theIRS.

I've been w/ Pro for a couple decades, so I don't remember what the initial set-up was like, but it doesn't seem like it would be all that difficult for a software company to check. B4 a company authorized the use of their product to an EFIN could they not check that the person/firm that is using the EFIN is the same person/firm on the credit card or other payment method?

[David1980]

I've been w/ Pro for a couple decades, so I don't remember what the initial set-up was like, but it doesn't seem like it would be all that difficult for a software company to check. B4 a company authorized the use of their product to an EFIN could they not check that the person/firm that is using the EFIN is the same person/firm on the credit card or other payment method?

They're actually supposed to, but obviously that doesn't always happen. I can just imagine a bunch of software companies talking about how they shouldn't have to do that and it has no benefit against fraud on a software company discussion forum somewhere.

There's also the fact that it's easy to fake. http://content.govdelivery.com/accou...lletins/324f62 - the best part of this QuickAlert from Mar. 7, 2012 is it starts out talking about false acceptance letters and then goes on to tell software developers and transmitters that one way to ascertain they are performing e-file activities only for authorized providers is by requesting a copy of an acceptance letter. Yes, the acceptance letters could be forged - you should ask for a copy of the acceptance letter.

As far as protecting your own EFIN, IRS Publication 3112 indicates that authorized IRS e-file providers must protect their EFINs. Which is brilliant considering it prints on the 8879 as part of the ERO pin on every single return you do.

So it's easy to obtain legitimate EFINs. And the benefit to using professional software vs. DIY is practitioner PIN method of signing a return. Using DIY software you must have a match with the taxpayer date of birth and the prior year PIN or prior year AGI. With practitioner PIN method you don't need an accurate date of birth nor do you have to match prior year PIN or AGI. So it's easier to do identity theft with professional software.0

[David1980]

This idea WILL give them both, theIRS has been hacked, OPM has been hacked, and some Oregon departments have been hacked. This idea just consolidates the clients information for the taking.

I agree that it consolidates the client information for the taking. And while the IRS and other government entities could put in place appropriate safeguards on their own systems they'd have no real way to make sure every tax office does the same. Compromise someone's tax preparation business and you would get driver's license information in addition to all the information you had previously.

That's a definite negative to this. The question will be do the benefits outweigh that?

I think it stands to help with ID theft detection. The questions with the various breaches would be did they contain driver's license information and how long ago were they - since they'd need the current issued date. I don't believe that everyone or even a majority of taxpayers have their driver's license / state ID and issue/expiration dates compromised. Even for those that have been compromised it's far easier to get a driver's license reissued (and thus having a new issue date) than it is to get a social security number changed. As long as there are some taxpayers who do not have their driver's license / state ID information in the hands of the would be identity thief this sort of thing could improve identity theft detection. Will it catch 100% of ID theft? No.

[David1980]

Refunds should not be issued until the income and withholding has been verified by theIRS. That's where they need to focus efforts to prevent fraud. Be proactive, not reactive and we can beat this thing.

I agree, but that only covers the fraudulent returns that rely on bogus tax withholding. There's still the problem of refundable tax credits.

[TaxGuyBill]

Update: A ProSeries article says it "requires" the information for e-filing, and a ProSeries forum Moderator says it looks like the new MeF rules require it.



Beginning in 2015, the IRS now requires preparers to verify and enter the Taxpayer's and Spouse's identification information from their driver's license or state issued identification for e-filed returns.

https://accountants.intuit.com/support/tax/proseries/document.jsp?product=PROSERIES_TAX&id=INF29070

[TAXNJ]

Problem

Update: A ProSeries article says it "requires" the information for e-filing, and a ProSeries forum Moderator says it looks like the new MeF rules require it.



Beginning in 2015, the IRS now requires preparers to verify and enter the Taxpayer's and Spouse's identification information from their driver's license or state issued identification for e-filed returns.

https://accountants.intuit.com/suppo...AX&id=INF29070

Problem with this is that as of this date, this "requirement" has not been found on the IRS website. Also, another reply poster using Lacerte tax software (sister company of Intuit) said those ID fields not on the Lacerte 2015 software.

So you have the option of following what Pro Series says or IRS

[Lion]

My own identity was stolen, so far for tax filing (federal) only. I don't know where they obtained my info (just mine, not hubby who's primary on our returns). But, almost anyplace I have to use my SSN -- I'm on Medicare, so that's ALL places medical -- I also have to show my photo ID as proof of identity. So, my DL as well as SSN are with my mail-order pharmacy, hospital, doctors (all of whom seem to be part of much larger medical groups for billing purposes, Yale, New England Medical, etc.) If the thief files another return using my name/SSN for 2015, he probably has my DL and will have no problem e-filing again. Don't see how it will help me. Don't see how it will help keep the IRS from paying out a fraudulent refund.

[kathyc2]

I have to wonder if the IRS is authorized by law to even be able to require this information???

I would say that none of my clients would mind me having their DL info, but some of the very anti-gov't clients would have a big problem with me providing the IRS w/ the info.

[Rapid Robert]

Let me guess. . .

You charge extra to obtain RTN / DAN for direct deposit of refunds ? (Doubt if you even bother with direct debits.)

You charge extra to enter PIN that IRS has provided to taxpayer ?

You charge extra to change a mail address, or a daytime contact telephone number (or is that just left blank) ?

You charge extra to change last name of someone with recent marriage / divorce ?

Your guesses are all completely wrong. If my client requests certain updates to basic info, or if I suggest it is in their best interest, I do not charge extra. Not one client has ever asked me to keep a record of their driver's license info. The only time I have done so is back when I worked for H&R Block, as it was required info under the PATRIOT Act to receive a bank product (RAC, etc).

When I said I wasn't going to do it "for free", I wasn't referring to doing work for my clients, I was referring to doing work for the IRS.

BTW: As for "worry" about client with a balance due return, did it ever occur to you that part of the problem is someone (else) is frequently filing refund returns before a legitimate state return is ever filed?

Please try re-reading what I wrote for better understanding. I agree that filing a refund return could benefit from better ID theft protection. My comment was about balance-due returns -- for which a driver's license or other type of poor security information is useless. Are you implying the government should not accept a balance-due return or the accompanying payment without more security?