What the IRS is doing, and what you can do, to fight refund fraud

By: Ann G. Jakabcin

Related Attorney(s): David S. De JongEric J. RollingerMark W. SchweighoferDavid B. Torchinsky

Media Type: Alert

Waiting on your refund? Tax Day may have come and gone, but but next year's filing deadline will be here before we know it. Stein Sperling has helpful resources to make next year’s tax process easier.

IRS Refund Fraud
In an effort to combat the growing issue of refund fraud, the IRS has instituted a number of new policies and procedures in 2015. These include increasing the number and efficiency of identity theft data models and filters used to detect potentially fraudulent returns and working with financial institutions to recognize and stop fraudulent refunds.

The IRS also now limits the number of direct deposit refunds to a single financial account or pre-paid debit cards to three. Fourth and subsequent valid refunds will issued in checks that will be mailed to the taxpayer.

In addition, the IRS will issue an Identity Protection PIN (IP PIN), a unique six-digit number assigned annually, to victims of identity theft for use when filing their federal tax return to show that a particular taxpayer is the rightful filer of the return.

Certain taxpayers have the opportunity to opt into the IP PIN program. These are taxpayers who may be unaware that they are identity theft victims, but the IRS identified them as potential victims because their account has shown signs of identity theft.

More from the IRS:

Want to know more about possible IRS scams? Please see the following:
In February, David De Jong shared tips on spotting IRS scammers in a client alert.

During the Bar Association of Montgomery County’s 2015 Law Day Mark Schweighofer gave a presentation on avoiding tax scams.

Representing the troubled taxpayer
If you are looking for more helpful Tax Day advice, check out Stein Sperling’s resource center. The series of resources on “Representing the Troubled Taxpayer” offers information on a range of topics from installment agreements to foreign bank accounts.

If you have any questions, please contact a member of our Tax Law department at 301-340-2020.

See All Media

Resource Center

Sperm Donor Agreements: Why You Need One Even When Using…

The purpose of a donor agreement is to clearly establish that donor is not the child's legal parent.

Read more - Sperm Donor Agreements: Why You Need One Even When Using…
Estate Planning FAQs: Maryland Probate

Letters of Administration? "Interested Persons"? Accounts? Learn about the Maryland Probate Process.

Read more - Estate Planning FAQs: Maryland Probate
Wage Laws in Maryland, D.C. and Virginia: Common Issues

Missteps, such as misclassification of employees and paying workers "salary," can lead to claims.

Read more - Wage Laws in Maryland, D.C. and Virginia: Common Issues
FAQs about Wage Laws in Maryland, D.C. and Virginia

The laws are complex and provide for significant penalties for any violations.

Read more - FAQs about Wage Laws in Maryland, D.C. and Virginia