The Ongoing Fight Against Fraud

46% — That’s the drop in number of people who reported fraud during the 2016 tax season. The IRS has blocked over 631,000 potentially fraudulent tax returns through March 22 of this year thanks in no small part to a better educated public and the targeted EIC delay. This is a significant drop in fraud from what was reported last year. Certainly, it hasn’t stopped the scammers from trying their best. But on the part of the IRS, their efforts have significantly reduced the number of taxpayers getting caught up in those schemes.

The IRS is working hard to warn consumers to beware of these scams, but education is only half the battle. They are also fighting scam artists behind the scenes and have made significant inroads reducing tax identity fraud rates. Many of the IRS’ new safeguards are invisible to taxpayers but invaluable in fighting against tax ID fraud. Its efforts have stopped more than 1.4 million fraudulent returns, totaling more than $10.9 billion. Sally Greenberg

This tax season saw a huge drop in early filing much to everyone’s surprise. This obvious drop has been attributed to not only the changing political landscape, but also the Protecting Americans from Tax Hikes (PATH) Act. With the IRS imposed delay in getting refunds back, people who would be claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) simply stayed home. Knowing that the PATH Act would hold their refund past the usual 21-day turn around, there was simply no rush to get to their preparer. While this has caused tax preparers across the country a lot of frustration, the IRS hold has saved thousands of people from identity theft, saved tax offices from getting scammed, and shut down fraudulent offices.

The unfortunate part of the delays and fraud crack down, is the loss of consumer confidence. In the socially connected/instant news society, confusion and doubt can spread like wildfire. It is up to the independent business owners in this industry to help the IRS combat the negative image and the fraud through not only consumer education, but also continuing education for their preparers and employees. The IRS forums this summer always offer a wide variety of educational seminars, and combating fraud is sure to be a focus.

For more information, click here and find a forum near you this summer.
Related: Earned Income Tax Credit Receives Nearly $16 Billion in Improper Payments from the IRS

—Steven Schmid, National Account Manager