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Old 02-22-2015, 08:47 AM   #21
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Somehow, much of the developed world has solved this problem.
Really? Or perhaps in many developed countries they've already figured people's taxes from wages more closely and refunds are rare?

But I suspect it's more that other countries require banks to offer no minimum checking to all citizens.
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Old 02-22-2015, 08:54 AM   #22
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Why So Many Americans Don't Have Bank Accounts | TIME.com

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In the South, 9.2 percent of people don’t have an account compared with 7.4 percent in the West, 6.8 percent in the Northeast and 6.4 percent in the Midwest, based on FDIC data.
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Canadian banks are required to provide accounts without minimum opening balances to all residents, regardless of employment or credit history. No such rule exists in the U.S
U.S. Lags G-7 in Bank Accounts as Poor Can't Build Assets - Bloomberg Business
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Old 02-22-2015, 10:13 AM   #23
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True, but that is a huge hole easily patched, the companies already have the data, as it was sent to employees, and when patched it will cut down considerably on the frauds successes.
Maybe USG will roll out a patch next month.
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Old 02-22-2015, 10:16 AM   #24
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Maybe USG will roll out a patch next month.
Well, it might get Congress off of the IRS back in terms of letting them at least have employer data to double match before issuing a refund. Clearly the "early refund" pendulum has swung too far, and that is exactly what the crooks are taking advantage of.
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Old 02-22-2015, 11:40 AM   #25
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I work with USDA on filing assorted farm forms. The requirement is to do paperwork in person, and that is sometimes a challenge. You can establish a Power of attorney, with multiple IDs, signed in person at an office, or with a notarized signature on special government forms. It seems to me that 'the government' has no problem requiring multiple forms of ID for dealing with many of its entities.

On the other hand, there is tremendous uproar over requiring IDs for voting, and anything that looks like data gathering. Thus, I suspect anything that tries to require better identification for a tax refund will have similar protest.

For my nickle-

I understand how the prepaid card solves a number of problems. So, you pickup your prepaid card in person from one of many sources. Some ID to connect the person to the return, hand print and photo of the person collecting the card, machine prints the card, good to go. Locate the machines at post offices, other government offices. I suspect that some of the Big Box Stores would be willing to have an issuing center located in their building.

I can hear the screams about collecting information. At some point, there needs to be a correlation established between the SSN on the return and the person collecting the cash. The fingerprint would be challenged, yet we collect those for some folks coming into the country. Maybe it is too far. Certainly requiring folks to pick it up in person, and take a picture to attach the face to the SSN seems reasonable to me. It does not close the door to direct deposit into a bank.
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Old 02-22-2015, 12:11 PM   #26
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I posted this the thread about Turbotax security.

It turns out, that the reason there was a mushroom of state fraudulent eFiles with Turbotax, is because that is the only software that will let you file so-called unlinked tax returns (unlinked to a Fed filing). And overwhelming number of new fraudulent state eFiles was using unlinked returns.

I think TT has disallowed that feature now.
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Old 02-22-2015, 12:17 PM   #27
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Really haven't been surprised at how this fraud has mushroomed. You have many part-time people working at tax prep companies. They do not need to have mad skills - the tax prep company's software walks them through everything. So you have someone who is morally challenged working there, gathering data along the way. Next year, you have a ton of valid SSNs, names and addresses already in hand, you know which ones will need to receive W-2s before filing and then you gather some buddies, and go to town submitting fake tax forms as soon as filing season opens. You'd have a pretty good shot at getting the fake return processed before the legit taxpayer would receive their W-2s and can file.

I'd love to know what the correlation is between people who have been victimized by this, and how many of them used chain-store or VITA tax preparers previously.
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Old 02-22-2015, 12:59 PM   #28
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People also bribe clerks at doctor and dentists office.
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Old 02-22-2015, 01:47 PM   #29
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Besides the rush to send out money, which the IRS should not do since it allows fraud.

The IRS has also mailed hundreds of checks to the same address, I mean really how about a limit of say 5 checks per address should cover nearly all cases.

And how about some consistency checking on returns, if my employer and refund method changes and my investment reporting drastically changes or I sprout new children suddenly and am over 40 perhaps they IRS should put my return into the slow lane and question the authenticity.

They have all this information, it's just a matter of writing some software to solve it.
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Old 02-22-2015, 03:48 PM   #30
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Really? Or perhaps in many developed countries they've already figured people's taxes from wages more closely and refunds are rare?

But I suspect it's more that other countries require banks to offer no minimum checking to all citizens.
That could be an interesting discussion.

In the UK the default position for under or over payment of taxes is to adjust the withholding for the following year. Large differences are unusual because the tax code is very simple for the vast majority of tax payers.
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Old 02-22-2015, 04:20 PM   #31
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There are a lot of tax payers who don't have bank accounts. They have to be accommodated somehow.
So how do these same taxpayers get paid? In order to get a refund, they must have had income of some sort. How is that income getting to them?
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Old 02-22-2015, 04:31 PM   #32
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So how do these same taxpayers get paid? In order to get a refund, they must have had income of some sort. How is that income getting to them?
Our local grocery store in Baton Rouge used to have signs up saying that folks could cash their work checks at customer service, so that is one way.
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Old 02-22-2015, 04:32 PM   #33
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So how do these same taxpayers get paid? In order to get a refund, they must have had income of some sort. How is that income getting to them?
These days they get paid by pre-paid debit cards. That has become common. It used to be cash.

Ironically the very same vehicle being abused for tax refunds.
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Old 02-22-2015, 04:35 PM   #34
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Our local grocery store in Baton Rouge used to have signs up saying that folks could cash their work checks at customer service, so that is one way.
That too. It's also an option for a tax refund check. But if people are trying to prevent fraud by disallowing mailed out checks, then yet another avenue closed. It's tricky.

Normally IDs are checked when cashing a check, so that is better than the refunds on debit cards.

But frankly, I'd be worried about someone stealing my check out of the mail.
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Old 02-22-2015, 04:49 PM   #35
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How about using the USPS. Anyone withoutout a checking account goes to local USPS with proof of ID to pickup the check.

Another thing that seems simple is to stop using SS#s. The IRS already has ITINs ( Individual Taxpayer Identification Number), but only uses them for those than don't have a SS#.

General ITIN Information
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Old 02-22-2015, 04:59 PM   #36
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Meanwhile back at the ranch, we can be penalized for shorting our tax payments, so we can pay a little instead of getting a refund. Thats the way I do it safe harbor no more.
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Old 02-22-2015, 05:11 PM   #37
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One option would be to require some data from the previous tax return as an element of an identifier. Change the element requested randomly. That wouldn't help first time filers but there must be some piece of data the IRS has that wouldn't be easily knowable by scammers.
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Old 02-22-2015, 05:13 PM   #38
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How about using the USPS. Anyone withoutout a checking account goes to local USPS with proof of ID to pickup the check.

Another thing that seems simple is to stop using SS#s. The IRS already has ITINs ( Individual Taxpayer Identification Number), but only uses them for those than don't have a SS#.

General ITIN Information
How about requiring activation before the debit card can be used? The activation code is sent via text messaging or email. Obviously, some people have no access to cell phone or internet.
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Old 02-22-2015, 06:45 PM   #39
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One option would be to require some data from the previous tax return as an element of an identifier. Change the element requested randomly. That wouldn't help first time filers but there must be some piece of data the IRS has that wouldn't be easily knowable by scammers.
I seem to remember that TurboTax does this for Federal e-file. I had to enter the previous year's AGI at some point in the process.
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Old 02-22-2015, 08:47 PM   #40
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I seem to remember that TurboTax does this for Federal e-file. I had to enter the previous year's AGI at some point in the process.
I just e-filed with HRB and had to provide last year's AGI. And, IRS says that AGI / PIN validation is required for all e-filers:

Get Your Electronic Filing PIN

I don't get how this fraud is occurring...guess I don't have a well developed criminal mind...
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