Following the latest Summit meeting this week, the parties said that data elements are being updated and expanded. The data elements are being utilized to authenticate the filing of a tax return by the real taxpayer. The participants also agree to include 32 data elements from business returns.
At the same time, the IRS said there had been significant improvement in preventing fraud and ID theft from steps already taken. The number of individuals reporting stolen identities involving federal tax returns has fallen by nearly 50 percent. There have been nearly 275,000 fewer victims compared to a year ago.
And as the Summit produced new recommendations, vendors were announcing their steps to fight criminals. Jon Baron, managing director, professional segment for Thomson Reuters' Tax & Accounting business was asked the most important issue emerge at this year's Synergy, the company's user conference.
"I think the biggest issue is security," says Baron, who participates in the Summit process. At the conference, his company introduced The Authenticator, which enables users to utilize multi-factor authentication to use its tax software.
At the Summit, it was announced more than 20 states are working with the financial services industry to create programs to enable the industry to flag suspicious refunds before they are deposited into taxpayer accounts.
The private sector is also strengthening efforts to ensure refunds go into the real taxpayers' accounts, not into those of fraudsters.
Additionally, the Form W-2 Verification Code initiative which started last year is expected to expand to 50 million forms, up from 2 million in 2016. The tax software prompts individuals and tax professionals to enter a 16-digit verification code to validate information on the form. Use of the code is expected to be expanded in the future.
Finally, the software industry will continue to enhance software password requirements for both individuals and tax professionals.