Steps taken during the 2012 filing season included the use of filters, tools to identify taxpayers with new circumstances such as a new job or bank account and enhanced use of the functionality of the Identity Protection Personal Identification Numbers for those whose identities had been stolen.
Besides recommending the delay of refunds, the council suggested that the IRS consider requiring fingerprints or other unique identifiers that could be associated with Social Security numbers used on tax returns. Fingerprinting could be performed by local police or other approved group, it said.
The council also noted the expansion of the number of individuals who are being required to have Registered Tax Preparer Identification Numbers. It said that about 500,000 individuals who are not CPAs, tax attorneys or Enrolled Agents might be unaware of their obligations under Treasury Circular 230 and the Internal Revenue Code.
These persons should be required to sign an acknowledgment that they are subject to Circular 230, the report continued. It noted that such an acknowledgment is already required with Form 2848, Power of Attorney and Declaration of Representative, which contains a declaration by the representative indicating awareness of regulations contained in Treasury Circular 230 concerning practice before the IRS.
However, the council's report said the acknowledgment for tax preparers should list activities that involve tax return preparation and advice as constituting practice before the IRS.