PORTLAND, OR--(Marketwired - Mar 23, 2016) - iovation, the provider of device intelligence for authentication and fraud prevention, today released intelligence it has gathered from its financial services clients about 2015 tax returns.
Among its conclusions, iovation found that the IRS is now taking up to 21 days to review a tax return. Last year, a similar tax return took seven days to review. This increase of taking up to three times as long to review filings is attributed to the IRS' increased anti-fraud measures and due diligence to identify fraudulent returns. Earlier this year, the agency said it planned to issue nine out of 10 refunds within 21 days.
"Tax and wage-related fraud was the most common form of identity theft reported to the Federal Trade Commission in 2015, so the fact that the tax review periods have tripled to combat fraud is encouraging," said Scott Waddell, CTO at iovation. "We applaud the government's efforts to minimize tax fraud because those criminals aren't just costing the government money, they're also hurting taxpayers and businesses."
The IRS has implemented new tax fraud safeguards this year including industry-wide standards for passwords, account validation and information sharing to help spot and stop fraud. In 2015, it claims to have stopped 1.4 million confirmed identity theft returns, totaling $8.7 billion. The IRS reported that in 2013, it paid out $5.8 billion in fraudulent refunds to identity thieves.
How Tax Fraud Occurs
Typically, tax fraud occurs like this:
1. A fraudster obtains a legitimate Social Security number and birthdate through a phishing scheme or site breach.
2. The fraudster files a return as early as possible in order to beat the legitimate taxpayer to filing. People aren't aware that they've been victimized until they file their return and it's rejected because the IRS only accepts one filing per Social Security number.
3. The fictitious filer elects to receive a prepaid debit or gift card so they do not have to enter bank account details for fulfillment and can exit the funds as soon as possible.
How Consumers Can Stay Safe
The IRS reports it takes an average of 278 days before an identity theft claim is cleared. While there is no foolproof way to protect your identity, consumers can take these precautions to protect themselves from falling victim to tax fraud:
1. File as early as you can - For most legitimate taxpayers, this means not before the end of January when they receive W-2s. If you file your tax return first, an identity thief will be denied when trying to use your Social Security number to file a fake return.
2. Protect your personal information - That means shredding documents that contain your personal information, reducing the number of times you give it out, questioning anyone who asks for it about whether and why they really need it, locking your mailbox to prevent mail theft, and constantly monitoring for mail, phone and email scams.
3. Review your Social Security earnings statement - Take a look at your Social Security earnings statement each year. If that number is off, contact the IRS immediately.
4. Delete pictures of your W-2 - Some tax apps require users to take a photo of a W-2 form, but e-filers should delete that image immediately afterwards.
5. Avoid public Wi-Fi when filing - Skip using the Wi-Fi at a coffee spot, hotel or library to file tax returns online. Criminals can access your computer on a public Wi-Fi network and steal your personally identifiable information.
6. Ignore calls or emails claiming to be the IRS - The IRS will never call or email you to ask for personal information. Ignore phone calls from someone who claims they work for the IRS stating that you owe back taxes and will be arrested if you don't pay immediately.
7. Avoid fly-by-night tax services - It is important to choose carefully when hiring an individual or firm to prepare your return. The IRS has a list of tips for choosing a preparer, details on preparer qualifications, and information about how and when to make a complaint.
About iovation
iovation protects online businesses and their end users against fraud and abuse, and identifies trustworthy customers through a combination of advanced device identification, shared device reputation, device-based authentication and real-time risk evaluation. More than 3,500 fraud managers representing global retail, financial services, insurance, social network, gaming and other companies leverage iovation's database of billions of Internet devices and the relationships between them to determine the level of risk associated with online transactions. The company's device reputation database is the world's largest, used to protect 15 million transactions and stop an average of 250,000 fraudulent activities every day. The world's foremost fraud experts share intelligence, cybercrime tips and online fraud prevention techniques in iovation's Fraud Force Community, an exclusive virtual crime-fighting network. For more information, visit iovation.com.
Contact Information:
CONTACTS:
iovation Inc.
Connie Gougler
503-943-6748