Preventing identity theft with new data safeguards


Cybersecurity and identity theft are key concerns of the IRS, as evidenced by the latest edition of the Electronic Tax Administration Advisory Committee’s (ETAAC) annual report to Congress.


This year, as part of its identity theft prevention strategy, ETAAC announced several new security initiatives that’ll affect Payroll.


Verifying W-2s


Protecting the info on employees’ W-2s is high priority. The IRS has previously warned Payroll to look out for scams where criminals send fake emails in an attempt to steal W-2 data.


Now, ETAAC is taking it a step further. The committee’s been working with a select group of Payroll pros to fight W-2 fraud using a new verification code that’s submitted with the forms to prove they’re authentic.


In 2017, 50 million W-2s were sent to the IRS with the code. ETAAC is currently evaluating the success of this initiative – and depending on its findings, you may have to use W-2 verification codes in the future.


E-filing rates


The IRS wants most tax returns to be filed electronically because it’s easier to keep confidential data safe.


For 2017, the agency expects to meet its overall goal of having 80% of all major returns filed online. But employment tax returns lag behind.


Only about 38% of all Forms 94X were filed online this year, per IRS projections – the lowest rate out of all the major returns.


With that in mind, the IRS will continue to focus on getting more Payroll pros to e-file returns, which might include additional options to submit forms.


Partial TINs, EINs,


Besides encouraging e-filing, the IRS is looking at other ways to boost information security.


One area being considered is allowing the use of truncated Taxpayer Identification Numbers (TIN) and Employer Identification Numbers (EIN) on more types of returns.


Because the agency’s looking at alternate tactics to verify returns (such as verification codes), the fun TIN or EIN could no longer be required in some cases.


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