Tascet has released technology that it said tax preparers can use to prevent multiple filings of tax returns by fraudsters.
Identity theft-related tax fraud has been a growing problem for the Internal Revenue Service in recent years and has sparked several congressional hearings (see Congress Probes Tax Prep Fraud and Identity Theft and IRS and Social Security Urged to Curb Tax Fraud and Identity Theft). Treasury Inspector General for Tax Administration J. Russell George recently testified that up to $26 billion could be lost to tax identity fraud over the next five years. The filing of multiple false tax returns by the same individual presents the biggest challenge. The IRS reported that in 2011 approximately 940,000 tax returns with $6.5 billion in refunds involved identity fraud.
Financial Iconn, introduced Monday at the FinovateSpring 2012 conference in San Francisco, provides fraud prevention and investigation features. The identity verification technology aims to prevent impostors from being able to file multiple tax returns using somebody else’s name, Social Security number and other personal information.
Tascet uses a finger proof and photo to establish a user’s identity, along with the person’s name, address, gender, date of birth and country of birth. After a “Financial Iconn” is established using this information, customers can activate it when goods or services are needed at businesses using Tascet. Once a taxpayer’s Financial Iconn is activated by Tascet, it can be used by tax preparers for real-time identity verification when filing tax returns.
“In addition to being a consumer-focused tool, Financial Iconn also acts as a proactive compliance mechanism,” said Tascet chief operating officer Brian R. Bodager in a statement. “Attention is shifting from individual taxpayers to the intermediaries who deal with hundreds or even thousands taxpayers. It is only a matter of time until stronger compliance requirements, similar to KYC in the banking industry, are imposed by regulators on tax preparation companies and the software that they use.”
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