IRS enhancing authentication, cyber education


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The IRS introduced multiple new initiatives to curb identity theft of taxpayers at its Security Summit last week, including a substantial expansion to an authentication program.

The agency said it will add 50 million verification codes  as part of an W-2 tax forms pilot program in the 2017 fiscal year, IRS Commissioner John Koskinen said. The initiative will give taxpayers a 16-digit alphanumeric password to protect their information, which the IRS hopes will stop fraudsters in their tracks.

Last season, Koskinen said the IRS ran a successful pilot program with 2 million tax forms.

“We appreciate the support we’ve had from the payroll service community and the software industry on this project,” he said during a briefing for the summit. “This will be an extra layer of protection that will help taxpayers and the tax system.”

The IRS will also enhance its authentication by taking new data elements from tax returns, which will help the agency identify possible scams. Already, it has shared over 20 such elements. 

At the Security Summit, the IRS not only outlined its future plans but also pointed out its previous successes. The IRS stopped $1.1 billion in fraudulent refunds claimed by identity thieves this fiscal year — $246 million more than in fiscal year 2015, according to a press release.

Alongside authentication improvements, the IRS will expand its security education campaign, “Taxes. Security. Together.” The IRS launched the program in November to give taxpayers more tools and information on how to identify phishing emails and prevent cyberattacks. 

In 2017, the IRS will also launch the Identity Theft Tax Refund Fraud Information Sharing and Analysis Center as part of the Information Sharing and Analysis Center Work Group. The center will act as an “early warning radar” against fraud, the IRS said.

“With the ISAC in place, the ability of all partners in the Security Summit Group to safely share and access information will be greatly improved, to the benefit of all,” Koskinen said.

The Strategic Threat Assessment and Response Work Group will also begin to help the tax industry implement the National Institute of Standard and Technology’s Cybersecurity Framework.

Despite the improvements, the IRS has come under fire for poor security that led to a major breach last year. Last week, the agency shut down its e-filing PIN tool after multiple cyberattacks.

[Read more: Amid new cyberattacks, IRS shuts down e-Filing PIN tool]

“Obviously there’s still a long road ahead of all of us, but I’m greatly encouraged by the progress we have made so far,” Koskinen said. “I’m confident that we will continue to build on the accomplishments of this past year, and continue providing stronger and better safeguards for taxpayers, to protect them and the tax system against the crime of identity theft.”

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Attacks & Breaches, Cybersecurity, Government IT News, Innovation, IRS, John Koskinen, Regulations & Oversight, Tech
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