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New Tax Filing Security Protocols



Annette Nellen

New Security Step – IR-2016-124 (9/22/16) – The IRS alerted people filing an extended return electronically for 2015 (due 10/17/16), that they likely would be asked to enter their AGI (Adjusted Gross Income) for 2014. The purpose is to help properly identify the taxpayer. The information release reminds people how to order a tax transcript from the IRS should they not have it.

Some states are using a similar system where they might ask for a driver’s license number or other identifying data that a thief might not have (although a thief might easily get someone’s driver’s license, such as because it is on their checks and cancelled checks were thrown out in the trash).

The Alabama Department of Revenue has a few programs to improve security and reduce identity theft. For example, taxpayers may register for a service where they are notified if a return is filed with their Social Security Number. The DOR also has a protection program that begins with the “ID confirmation quiz.” The state also highlights its programs in the Form 40 instruction booklet (although few people likely read this).

What more do you think the IRS and state tax agencies should do to protect the very sensitive information they have?

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Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.

Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.

Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.

Prior to joining SJSU, Annette was with Ernst & Young and the IRS.

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