Ed note: It’s National Consumer Protection Week, and these days you might feel like you need a lot more protection – from phishing schemes, identity theft and more. H&R Block CEO Bill Cobb is taking this opportunity to shine a spotlight on tax identity theft fraud.
You don’t have to search too hard to hear about personal information theft. In the past 18 months alone, there have been attacks in multiple industries leading to extraordinary levels of fraud that can affect any one of us.
The truth is, like fraud in general, tax identity theft fraud is a growing problem. In 2013, more than $5.2 billion in tax refunds was doled out to fraudsters. That’s billions of dollars out of taxpayer’s pockets and out of the federal budget that supports our nation.
So what is being done to change this?
Tax identity theft fraud is not inevitable. There are simple ways the tax preparation industry, government and taxpayers can work together to prevent it.
For example, did you know that there are no uniform federal standards applied to all paid tax preparers? In fact, only four states have any such standards. So if you live in California, Oregon, Maryland or New York, you’re more likely to have a preparer who has undergone formal training and been tested. We think that’s an important part of protecting consumer’s financial safety at tax time. Having high standards is something we know a thing or two about – we set the bar for the industry when it comes to making sure our tax experts understand the tax code and how it applies to all kinds of different individual or family situations. We think the whole community should rise to those standards to better serve consumers.
We also need to address the standards governing DIY software and online methods of filing tax returns. DIY methods are increasingly exploited by fraudsters, but there are industry-wide things we can implement to make it harder for these fraudsters. One way we’re protecting against this is that any filers who use H&R Block DIY products must have their federal return accepted by the IRS before they can file their state return. Without that key checkpoint in the system, criminals can take your stolen identity to file fake returns in several states because the states aren’t connected and talking to each other.
The good news is that taxpayers want more fraud protection in place. Our research shows that 86% of consumers want tax preparers trained to minimum standards; and 94% support holding DIY software to minimum standards. These results show that consumers are willing to take simple, yet important steps to protect the integrity of our tax filing system.
We’re here to help. For more information on solutions to tax identity theft or to see what protection H&R Block is offering clients, visit our fraud resource center.
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