Home Law Taxpayers test their memories to prevent crime

Taxpayers test their memories to prevent crime

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Some taxpayers may have to take a quiz to prove their identity to receive a tax return as part of a new screening system implemented by The Ohio Department of Taxation.

The four-question multiple choice quiz is the most noticeable of the changes made to cut down on tax return fraud and identity theft, according to Ohio Department of Taxation Communications Director Gary Gudmundson.

“We felt that we really had to take these extra measures to protect taxpayer dollars,” Gudmundson said. “[This] doubles the assurances that refunds are going out to the right people and not criminals.”

Filing fraudulent tax returns has become an increasingly common way for identity thieves to steal money. According to an ODT Fact Sheet on preventing identity theft, “would-be thieves are using real names and real Social Security numbers, often of deceased individuals, and filing tax returns with fabricated financial information…ninety percent of illegal claims are made on electronically filed returns.”

In the new security system, every tax return requesting a refund now goes through a screening process. If something “outside the bounds of normal” is found in the return, a letter is sent to the person who filed it, notifying them that they must now complete a quiz to verify their identity, Gudmundson said.

The quiz itself consists of questions about personal information gathered from databases — information that scammers wouldn’t know, making them unable to commit fraud. To ensure the security of this information, Gudmundson declined to give more details about exactly how this information is gathered.

Taxpayers asked to take the quiz are required to correctly answer three of the four questions to be issued their refund. If they don’t pass, they get one more try, after which they must submit various types of documentation to prove their identity if they fail again.

A fairly small proportion of people who have filed a tax return actually have to take the quiz.

“We’ve had approximately 1.4 million returns come in so far,” Gudmundson said. “Of that, about 175,000 have requested refunds. Of that 175,000, about half have been directed to take the quiz.”

While the questions are designed to only be answerable by the person whose name appears on the tax return, some say that the questions ask about details so small that most people would be unable to remember them, even concerning their own lives.

The Norwalk Reflector found one taxpayer who was asked about an address she once shared with another woman — a woman who was the taxpayer’s ex-husband’s third wife and with whom the taxpayer had never lived.

Altogether, the Department has stopped about $250 million in fraudulent refund claims so far this year with the use of both the security quiz and its assignment of “additional tax agents to its suspicious filers’ unit to focus exclusively on intercepting illegal returns,” according to the ODT Fact Sheet.

Despite some issues individuals may be having with the quiz, the Ohio Department of Taxation believes the quiz is working overall.

“There’s some questions that people feel are really out of bounds,” Gudmundson said, but “most people are succeeding.”

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