The IRS took the first steps to fight tax-related identity theft by proposing limited access to the Social Security Administration (SSA) files and revising the W-2 form for employers in the 2014 budget recently released by the White House
The potential changes will limit access to the Social Security Death Register, which maintains information, including Social Security numbers, on the deceased. Identity theft
criminals seek out these files for personal information to receive fraudulent tax refunds. After a death, those with legitimate fraud-prevention needs will be allowed access to the file. Following their initial right to view the file, it will be locked for three years with zero access.
Revisions to the W-2 form require employers to provide the IRS with an identifying number for each employee rather than just their Social Security number, creating another safeguard from fraudulent claims.
During 2012 the IRS employed 3,000 people dedicated to tax-related identity theft issues, prevented $20 billion in fraudulent returns and stopped 5 million suspicious returns.
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