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Cyber Risks · Krebs on Security

States Seek Better Mousetrap to Stop Tax Refund Fraud

Summary: State tax authorities are trying to move beyond static identifiers like birthdays, Social Security numbers and easily-guessed knowledge-based questions to authenticate filers, after the IRS disclosed thieves stole up to $50 million in phony refunds by pulling tax data on more than 100,000 Americans from its own Web site. Alabama Revenue Commissioner Julie Magee, on an IRS fraud and authentication working group, said the trade group ACTR blocked an Intuit-proposed red/yellow/green anti-fraud screening plan, though the IRS later rejected the group's claim that taxpayer confidentiality rules barred sharing the data.

What you should know: Tax refund fraud is a $6 billion-a-year problem, and as Magee put it, the only entities really losing out are states and the US Treasury while the banking industry makes a fortune off it - and Alabama's own deputy commissioner had a $7,700 fraudulent return filed in his name.

Read the original at Krebs on Security ↗

Topics
Data Breaches
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