The IRS has pulled 2.6-million individual tax returns in 2012 for possible identity theft, Steven T. Miller, deputy commissioner, services and enforcement, told the Council for Electronic Revenue Communication Advancement (CERCA) on May 16. Miller, speaking at CERCA’s 2012 Spring Meeting in Arlington, Va., also cautioned that the unusually large number of expired and soon-to-expire tax provisions could create challenges for the 2013 filing season.
Identity theft is on the increase, Miller reported, as is refund fraud. The IRS has designed new identity theft screening filters to spot fraudulent returns before they are processed.
So far this year, the Service has flagged some 2.6-million returns for possible identity theft, Miller said. On its website, the IRS explained that, once a return is flagged, the Service will correspond with the sender before further processing the return to make sure that it has the right taxpayer. The Service is spending approximately $330 million this year to combat identity theft and return fraud, according to Miller.
As identity theft grows, some have called for new safeguards. National Taxpayer Advocate Nina E. Olson has cautioned that increased safeguards could delay delivery of refunds. The timing of taxpayer refunds may need to be discussed, Miller said. "Taxpayer expectations on refunds may have to change."