As we enter into tax season, Electronic Returns Originators (EROs) are under the gun to comply with regulations from the IRS relating to verifying the identity of their customers. The current version of IRS Publication 1345 outlines the requirements for identity verification to be performed by Authorized IRS e-file Providers. Among the procedures included in this guidance is for Electronic Returns Originators (EROs) to “Verify that the name, social security number, address, date of birth and other personal information on record are consistent with the information provided through record checks with the applicable agency or institution or through credit bureaus or similar databases.” While this step is optional for in-person transactions, it is required for all remote transactions.
These requirements were already in place for the 2015 filing season, but it is safe to anticipate a higher focus on identity verification following last year’s data breach of the IRS affecting more than a half million taxpayers. While the identity verification requirements neither address the systematic flaws that resulted in the data breach nor prevent that information from being used fraudulently this year, the additional focus on potential identity fraud for tax returns does mean that additional scrutiny and enforcement should be expected.
While many EROs already addressed these requirements for the 2015 filing season for remote transactions, others either failed to comply with the requirements in 2015 or are working with remote customers for the first time this year. EROs who fail to comply are subject to having their status as an Authorized IRS e-file provider revoked.
The good news for procrastinators and those who are simply caught off guard is that it is still not too late. Electronic Verification Systems (EVS) offers a simple web-based solution that does not require any special hardware or software to be installed, and we can often get clients up and running in just one business day. Our platform offers the flexibility to scale with the needs of EROs, and is cost effective for companies of any size. To see how EVS can help your business comply with IRS identity verification requirements, contact
us to request a demonstration.