2014 Dirty Dozen Tax Scams Released. How Are You Protecting Consumers?

Since last year’s tax filing season which saw a considerable amount of fraud, the IRS has been working hard to expand their efforts to better protect taxpayers and help any victims that took a hit. Even though stopping identity theft and refund fraud is on the top priority for the IRS, recent studies have shown that fraudulent behavior patterns are still on the rise. In this typically high-fraud season, is your company doing everything it can to protect consumers?

This year, identity theft once again tops the IRS “Dirty Dozen” list. Fraudsters are using personal information, such as Social Security Number (SSN) without permission to file a tax return and claim a refund. Other top scams that made the IRS’s list include:

  1. Telephone Scams: Fraudsters calling consumers pretending to be from the IRS in order to steal money or their identity.
  2. Phishing: Offenders attempt to steal an individual’s financial information through a fake website or email.
  3. False Promises of “Free Money” from Inflated Refunds: Criminals making claims for fictional rebates, benefits or tax credits.
  4. Return Preparer Fraud: Deceitful tax return preparers claiming improper credits, deductions or exemptions in hopes of boosting refunds.

To read all of the IRS’s Dirty Dozen Scams, click here.

While this list verifies that tax scams persist, overall, the IRS is working hard on preventing identity theft and fraud. By late 2012, the IRS assigned more than 3,000 IRS employees to work on identity theft-related issues and in the first three months of 2013, the IRS worked with victims to resolve and close more than 200,000 cases. However, fraudsters continue to grow and evolve – shifting tactics just as fast as they are exposed. As an organization operating in the customer-not-present environment, it is vital to do your part in protecting consumers from fraud. Here are just a few things to consider:

  1. Employ robust identity verification and fraud prevention processes to ensure your customers are who they say they are.
  2. Enable dynamic decisioning through a completely customizable and on-demand authentication platform in order to analyze the composition of an identity, including any fraud flags, and make educated decisions based on the results.
  3. Escalate to a higher level of verification only when fraud flags exist – not for every customer – which will reduce friction while also mitigating risk.
  4. Leverage your own internal data to verify customers (see IDology’s ExpectID Customer Based Authentication)
  5. Augment your due diligence process by adding photo ID scan & validation (see IDology’s ExpectID Scan & Verify)
  6. Partner with a technology solution that is highly innovative and provides you with a platform for industry collaboration.

Visit www.IRS.gov for more information on tax scams.

WEBINAR

BALANCING FRICTION AND FRAUD: Insights from the 2nd Annual Consumer Digital Identity Study

Featuring Christina Luttrell and Eric Leiserson as presenters

May 23 at 2:00pm EDT

NEW RESEARCH

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SECOND ANNUAL CONSUMER DIGITAL IDENTITY STUDY