Article written by:
Christy Zimmerman, CPA
Senior Manager, Tax & Business Advisory Services
The IRS’s efforts to combat identity theft have shown success. Individuals reporting identity theft from tax-related schemes has significantly declined. In the first 5 months of 2017, 107,000 taxpayers reported being a victim of identity theft compared to 204,000 for the same period in 2016 and 297,000 in 2015. The decline can be largely attributed to the additional safeguards that were put in place by the IRS Security Summit in 2016.
Although they have seen success, there is still work to be done. The IRS also saw an increase in identity theft victims involving business-related tax returns. So far in 2017, the IRS has identified 10,000 business returns as potential identity theft returns (compared to 4,000 in 2016 and 350 in 2015). Although the number is not significant, the IRS fears the potential dollar amount is significant and will only increase going forward. The returns suspected of identity theft include C-corps, S-corps, estate and trust returns and schedule K-1 filings made by partnerships.
Beginning with the 2018 filing season (2017 tax returns), the IRS may require additional information to electronically file business tax returns in order to authenticate the tax return being filed. Some of the new information the IRS may require is as follows:
- Name and social security number of the company individual authorized to sign the business return
- Payment history – were estimated payments made? If yes, the IRS will now require when they were paid, how they were paid and the amount.
- Parent company information
- Additional information based on deductions claimed
- Filing history of other business related tax forms (940, 941, etc.)
When the filing season is upon us, GBQ personnel may be asking some new and specific questions. I think we can all agree the extra effort is welcomed.