Ohio Department of Taxation Stops Thieves From Stealing Millions
The implementation of an identification verification quiz by the Ohio Department of Taxation has helped stopped identity theft and income tax fraud since it was implemented last year for the 2015 income tax season.
Rea & Associates recently compiled a variety of information to help victims of identity theft and refund fraud recover from this nightmarish scenario. Click the image above to access this resource.
Tax fraud has been on a steady upswing for quite a while – a frightening trend that has led the Ohio Department of Taxation (ODT) to take innovative measures during the 2015 tax season. Nearly one year after announcing plans to implement the state-wide quiz designed to filter tax-refund requests by analyzing demographic information reported on the taxpayer’s return, officials boasted incredible results.
While ODT reported a 400 percent increase in fraudulent refund requests in 2015 from the year prior, the quiz helped the department prevent 232,898 suspicious returns from being filed – which saved the state about $256.5 million in illegitimate funds.
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The implementation of this verification method was deemed necessary after ODT noticed a monumental increase in fraud cases during the 2014 tax season – $250 million in attempted tax fraud – compared to previous years when the average was around $10 million.
“We appreciate the taxpayer’s time in taking this extra step before receiving their refund,” said Joe Testa, tax commissioner, in a release. “The quiz has been and will continue to be instrumental in stopping fraud.”
According to the ODT, the tax quiz has been effective because of its effectiveness when analyzing tax returns for inconsistent data points against public and commercial data sources. For example, a return may be flagged if your name and/or Social Security number show up in a different parts of the state (or in another state altogether) when you have been primarily located in another area of Ohio over the last few years. To claim your refund, you will be required to take the identity quiz, which would either indicate that you’ve moved in the last year or that a fraudster is trying to claim your refund. For your return to be processed, you must either take the quiz or provide documentation to verify your identity.
Testa also said that the department has gathered feedback and have “made some changes to improve the process and provide a better experience for taxpayers who take the quiz.”
Looking ahead, taxpayers should expect to see more of the identification quiz in 2016 and beyond. Here are three things you should know about the identification quiz:
- Allow more time
Traditionally, it takes up to 15 days to process refunds that have been distributed to the taxpayer via electronic deposit. Those who opt to receive their refunds in check form could have to wait up to 30 days. The quiz, however, could prolong the process.
- Know, don’t guess
Those who are selected to take the quiz, will receive a letter that will explain your next steps. If you do not receive this letter, you will not be able to complete the quiz.
- Be prepared
If your return is flags, you will have 60 days to complete the multiple choice quiz. Furthermore, the quiz is timed and must be completed online.
To learn more about the effectiveness of this measure or for more great information, check out the Frequently Asked Questions available on the DOT website.
Are you wondering if you are going to need help filing your 2015 tax return this spring? Email Rea & Associates for assistance.
By Lisa Beamer, CPA (New Philadelphia office)
Want to discover more ways to prevent or recover from identify theft? Check out these articles.
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