The Electronic Tax Administration Advisory Committee’s report to Congress focuses on preventing ID theft and tax refund fraud, in addition to enabling and expanding the IRS-sponsored Security Summit.
“IDTTRF [ID theft and tax refund fraud] threatens the integrity of our voluntary compliance tax system at both the federal and state levels. The wholesale theft of huge volumes of personal information has provided criminals and other bad actors with detailed and accurate taxpayer information,”
The report’s recommendations fall under three themes: strengthening the Security Summit and Information Sharing and Analysis Center, improving security, and protecting and enabling taxpayers. The report also includes an update on IRS efforts to increase e-filing.
The report recommends:
- Continued funding for the Security Summit and ISAC;
- Integrating payroll providers more fully into the Security Summit;
- Improving security in key areas by assessing the state of security among tax professionals, and giving the IRS the authority to create and enforce security standards; and
- Developing and expanding channels for identity proofing, collaborating with Security Summit members on methods for identity verification, and working with the Security Summit to improve the IRS Taxpayer Protection Program’s taxpayer experience.
The report’s introductory letter also makes five points:
- The Security Summit and the IRS have made strides in this area, but continued progress “will require continued engagement with existing and new partners from both government (federal, state and local) and industry.”
- Congressional funding and support for the Security Summit and ISAC are critical.
- “Nation-states and cybercriminals are becoming more sophisticated and will continue to make it difficult to detect and stop their criminal activities, which will directly impact legitimate taxpayers trying to meet their tax filing obligations.”
- New tax laws, such as the Tax Cut and Jobs Act, don’t just require IRS resources for basic implementation, but also for identifying and analyzing any potential ID theft and tax refund fraud opportunities they may create.
- “The commitment and professionalism of the IRS leadership and staff during the government shutdown was exemplary,” the report said.
The ETAAC is a public forum whose members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation’s tax industry. ETAAC members represent various segments of the tax community, including individual and business taxpayers, tax professionals and preparers, tax software developers, payroll service providers, the financial industry and state and local governments.
