IRS’ added efforts to fight ID theft

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Tax-related identity theft continues to be a concern, but the Internal Revenue Service is making inroads on stemming the problem.

Progress on halting tax refund fraud was just one of the agency’s accomplishments that IRS Principal Deputy Commissioner Daniel Werfel cited during an address July 30 to tax professionals meeting in Grapevine, Texas.

Nearly every part of the IRS is involved, says Werfel, with more than 3,000 IRS employees now working on identity theft. That’s more than double the number of staff in that area at the start of the previous filing season.

“We have also trained 35,000 employees who work with taxpayers to recognize identity theft and help victims,” says the acting IRS chief.

What has this increased focus yielded? Werfel says that so far in 2013, the IRS has worked with ID theft victims to resolve more than 565,000 cases. “This is more than three times the number of identity theft victim cases that we had resolved at the same time last year,” he says.

An ounce of prevention

But taxpayers and the IRS would rather prevent than clean up after identity theft.

To that end, Werfel says the IRS has expanded fraud detection efforts, increasing the number and quality of identity theft screening filters.

It seems to be working. “We have suspended or rejected more than 4.6 million suspicious returns so far this calendar year,” says Werfel.

As for the crooks trying to walk off with someone else’s tax refund money, Werfel says the number of investigations by the IRS’ Criminal Investigation division continues to rise, with more than 1,100 investigations opened so far in FY 2013.

The ID theft and tax fraud efforts were just one of the IRS successes that Werfel touched on in his 45-minute address to the generally friendly audience. He expressed appreciation for the tax preparer community’s willingness to work with the IRS to identify ways for it to do its job more effectively.

Do you have any suggestions for Werfel and staff? The IRS is always looking for suggestions on ways to streamline its operations and reduce the burden on taxpayers.

You can send your ideas to the agency via Form 13285-A. And you can share them in the comments below. Just remember, Bankrate is a family-friendly website!


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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and a co-author of the e-book “Future Millionaires’ Guidebook.”