For filing season 2016, the Internal Revenue Service will test a capability to verify the authenticity of W-2 data as part of a series of steps to combat tax-related ID theft and refund fraud.
The IRS has partnered with certain payroll service providers to include a 16-digit code and a new verification code field on a limited number of W-2 copies provided to employees. The code will be displayed in four groups of four alphanumeric characters, separated by hyphens.
The verification code will appear on some versions of payroll firms' W-2 Copies B and C, in a separate, labeled box (Copy B is "To be filed with employee's federal tax return" and Copy C is "For employee's records.")
The form will include these instructions to taxpayer and tax preparers: "Verification Code. If this field is populated, enter this code when it is requested by your tax return preparation software. It is possible your software or preparer will not request the code. The code is not entered on paper-filed returns."
Some W-2 employees receive will have a "verification code" box that is blank. These taxpayers do not need to enter any code data into their tax software product.
For the purposes of the test, omitted and incorrect W-2 verification codes will not delay the processing of a return. The IRS will analyze this pilot data to see if it is useful in evaluating the integrity of W-2 information.
The code will not be included in W-2s or W-2 data submitted by the payroll service providers to the Social Security Administration or any state or local departments of revenue, nor will this pilot affect state and local income tax returns or paper federal returns.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access