If time is money then the new security measures to protect Ohio taxpayer’s returns and prevent identity theft comes at a price. The Ohio Department of Taxation (ODT) said that in an effort to boost security and prevent tax-fraud in the state, Ohio will implement an “up-front filter to all tax-refund requests to analyze the demographic information reported on the return.”
According to Joe Testa, the state’s tax commissioner, the ramped up security is in response to increased fraud attempts. The Columbus Dispatch reports that the state foiled $250 million in attempted tax fraud during the 2014 tax season, which is a significant increase over the foiled tax fraud average of $10 million in previous years. Figures of how much fraud went undetected last year or in previous years are not available.
The Tax-Fraud Quiz
If your tax return is flagged as a result of anomalies in reported demographic information then you will have to complete an Identification Confirmation Quiz, according to Testa. If you are selected to take the quiz, you should expect a delay as to when your funds will be dispersed. Traditionally, it takes up to 15 days to process refunds that will be distributed to the taxpayer via electronic deposit. Those who opt to receive their refunds in check form could wait 30 days to receive their money. This year, those who must take the quiz to validate their identities, may have to wait longer than they have in previous years to receive their refunds.
Which Returns Will Be Flagged?
On its website, the ODT says that tax returns will be analyzed for certain inconsistent data points against public and commercial data sources. For example, in the Dispatch article, taxation spokesman Gary Gudmundson said that “names and Social Security numbers that show up in a different part of the state, or in another state, after being located for years in a specific area of Ohio” may be flagged. This means that if you moved this year, your return may flagged as one that has a higher probability of fraud. The next step is to take the quiz to verify your identity. If the return is flagged, the taxpayer will be required to complete the quiz or prove their identity through documentation before the tax return will be processed.
How To Know If Your Return Was Flagged?
The ODT will send a letter to taxpayers who are required to take the identification quiz. Those who don’t receive a letter will not be able to complete the quiz. Those who are selected will have 60 days to complete the multiple choice quiz. The quiz will be timed and it must be completed online. The state agency has provided answers to Frequently Asked Questions about the quiz on its website.
By Lisa Beamer, CPA (New Philadelphia office)