Posts Tagged ‘Ohio tax quiz’

Ohio’s Identity Theft Quiz Returns – With Modifications

Tuesday, February 2nd, 2016

Last year, Ohio’s Department of Taxation rolled out the Identification Confirmation Quiz, which required many Ohioans to prove their identities before receiving a refund. Needless to say, there were more than a few unhappy campers. However, despite its shortcomings, the quiz did what it was supposed to do – helped thwart tax fraud, which is why the Ohio tax quiz will make another appearance in 2016.

Read Also: How To Recover From Identity Theft & Tax Fraud

So, how successful was the quiz at stopping fraudsters from stealing refunds? Very. One Ohio news source reported that the quiz helped identify an estimated 234,336 fraudulent refund requests worth $259.1 million in 2015. The year prior, only 64,693 requests were reportedly stopped.

“We are committed to combating tax fraud and ensuring that tax refunds are paid only to legitimate filers,” said Joe Testa, Ohio tax commissioner, in an op-ed piece on the Ohio Bar Association’s website on Jan. 6. “We believe we’re among the leaders in the country in aggressively combating these fraud schemes. Last year, the Identity Confirmation Quiz was instrumental in that fight.”

Testa did go on to say that, after reviewing feedback from last year’s tax season, changes were made to the types of questions asked in an attempt to improve the entire process while facilitating a better experience overall. He said that further improvements were made to the department’s tax return analysis, which should result in fewer taxpayers from being required to take the quiz in order to receive a refund.

Tax fraud and identity theft continues to be a major problem throughout the nation, but you don’t have to stand by and do nothing. This article will provide you with some tips to help reduce your risk of becoming a victim.

By Lisa Beamer, CPA (New Philadelphia office)

Want more safety tips to help get you through tax season unscathed? Check out these articles:

Join The Fight Against Identity Theft & Income Tax Fraud

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Join The Fight Against Identity Theft & Income Tax Fraud

Friday, January 29th, 2016

Income tax identity theft and refund fraud has become a huge problem over the last few years; and while billions of dollars are finding their way into the pockets of fraudsters, the IRS is working hard to shut down these schemes.

The IRS paid roughly $5.8 billion dollars in fraudulent refunds to identity thieves over the course of the 2013 filing season. While that is a huge number, it could have been a lot worse. During the same time period, the amount the IRS successfully prevented or recovered totaled around $24.2 billion. But these statistics only take into consideration the fraud we know about.

Identity theft isn’t just a threat during tax season, scammers are exploiting a lot of cracks in your armor. Listen to episode 12: the great data saver on unsuitable on Rea Radio for insight from Joe Welker, CISA, Rea’s IT Audit Manager

The Unknown Number

While it is nice to know that the IRS is working hard to prevent identity theft and refund fraud, the truth is that we don’t yet have all the information to determine how bad the income tax fraud epidemic really is. This means that we continue to be at risk of becoming a fraud victim again this tax season. Perhaps if we knew how many fraudulent tax returns went on to be processed and how many billions of dollars were paid out to scammers looking to make a quick buck we could finally make some educated assumptions about the likelihood of being defrauded out of your refund check.

I don’t like not having all the necessary information.

Read Also: Ohio Department of Taxation Stops Thieves From Stealing Millions

This year, income tax fraud is expected to be higher than ever. This video, produced by abc6 out of Columbus, Ohio, shines more light on the topic of identity theft in Ohio.

Calling In Reinforcements

The IRS has realized that identity theft and refund fraud are threats that are showing no signs of going away. So the agency has requested help. The Internal Revenue Service, in cooperation with state tax administrators and tax industry leaders, has formed a public-private sector partnership to identify and test more than 20 new data elements on tax return submissions that will be shared with the IRS to detect and prevent fraudulent filings. The software industry is doing its part by putting enhanced identity validation requirements in place to protect customers and their personal information from identity thieves.

As of October 2015, 34 state departments of revenue and 20 tax industry members have signed memorandums of understanding regarding coalition’s roles, responsibilities and information sharing measures. More states are expected to sign on later.

Taxpayers Are Encouraged To Fight Back Against Fraud

Over the last 3 years, the IRS has initiated more than 3,000 fraud investigations. Those investigations have gone forward to convict and sentence close to 2,000 thieves to around 40 months in prison apiece. But there is still much to be done. They are doing their part.  We as taxpayers have to do ours.

In January, the IRS launched the “Taxes. Security. Together.” initiative to educate taxpayers on income tax identity theft and ways they can safeguard their information and protect themselves. According to the agency, there are several ways you can protect yourself from identity theft – especially during tax season:

  • Keep your computer secure
  • Avoid phishing email and malware
  • Protect your personal information

Above all, choose your tax preparer wisely and make sure they take their responsibility to safeguard your information very seriously. A tax preparer can also help if you do encounter a situation in which your information could be compromised.

By Ashley Matthews, CPA (Dublin office)

Want to take steps to ensure that you won’t be a fraud victim this year? These articles feature information that can help.

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Quiz Results Are In – And The News Is Good

Wednesday, December 9th, 2015

Ohio Department of Taxation Stops Thieves From Stealing Millions

Identity Theft & Income Tax Refund Fraud Resource | Ohio CPA Firm

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.

Read Also: Should I still be concerned about identity theft and tax fraud?

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:

  1. 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.

  1. 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.

  1. 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.

How Do You Protect Yourself from Identity Theft?

How To Recover From Identity Theft & Refund Fraud

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Update: Ohio Tax Quiz Appears To Be Working

Friday, March 13th, 2015
Tax ID Quiz

According to officials at the Ohio Department of Taxation, while the new Identification Confirmation Quiz may be a pain in the neck, it appears to be working as a identity theft deterrent – Rea & Associates – Ohio CPA Firm

We have learned over the last month that Ohio’s new system of validating taxpayer identification, the Identification Confirmation Quiz, appears to be working.

In an effort to boost security and prevent tax-fraud in the state, the Ohio Department of Taxation introduced the quiz at the onset of the 2015 tax season and began flagging tax returns with data points that are inconsistent with public and commercial data sources. If their returns are flagged, taxpayers are required to take a Quiz to prove their identities.

Read: Theft Safeguards To Cause Tax Return Delays In Ohio

“Through Feb. 18, more than 1.3 million tax returns have been filed with about 874,000 requesting a state income tax refund. About half of the refund requests have been selected for additional screening to ensure that they were not filed by an I.D. thief,” stated Ohio’s Tax Commissioner Joe Testa in a press release. “About 97 percent of taxpayers taking the quiz are passing. That proves they are who they say they are.”

That means about 3 percent who fail the test are being declined to receive refunds that they would have normally received in previous years. As long as that 3 percent consists of actual identity thieves, the results reported are significant.

By Lisa Beamer, CPA (New Philadelphia Office)

 

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