Tax Commissioner Shares Lessons of Tax ID Quiz

COLUMBUS, Ohio – Efforts by the Ohio Tax Department to reduce fraudulent income tax refunds has been successful in protecting the state treasury, Tax Commissioner Joe Testa told the Ohio Society of Certified Public Accountants Thursday.

This success has come at a price, he acknowledged, refunds taking longer to send out, the result of measures taken to ensure the recipient is who he says he is. The five to seven days it took the department to issue and electronically deposit a refund, as had been the case, can take a few weeks.

Last October, the Tax Department announced it would roll out an I.D. Confirmation Quiz to help the state reduce tax fraud, “which has become a significant problem,” Testa said.

Some $230 million in attempted theft in 2014 “was dramatically higher than in the past,” the tax commissioner said, emphasizing his department had suffered “no data breach.” In ways he did not know, fraudsters, including “some incarcerated individuals,” had possession of Social Security numbers and filed fraudulent returns. “We don’t know how they got the Social Security numbers,” Testa said.

The Tax Department handed pursuit of the criminals to the Ohio Highway Patrol and the Department of Public Safety, said Deborah Smith, administrator of the income tax division.

Testa discussed measures his department is considering to improve the quiz – that is, reduce the number of complaints from legitimate filers. One is removing the requirement to enter a Social Security number when logging in, another is eliminating the questions about the filer’s family relations that would confirm his identity.

For the 2016 tax season, however, the tax department has made no final decisions, Testa said.

The added safeguards, the director said, are essential to deterring fraud, and much as he regretted the longer time it takes for some to receive their refunds, the incidence of attempted fraud last spring dropped considerably.

SOURCE: Ohio Tax Department

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