To e-file or Not?

[TrvlBug]

Our new tax preparer is trying to talk us into e-filing rather than mailing our returns. I have read (accurately?) that most of the identity theft and false refunds hit people who e-file and not mail their returns. Reading the info WRT to the most recent scam, it appears this is not the case, but the result of preparers' computers getting hacked.

So, to e-file or not? Which is safer in your opinion?

 

[Freedom56]

I have been e-filing for over 18 years without any issues. I use TurboTax or Taxcut (whichever is cheaper). Tax preparers are going to be joining travel agents on the endangered jobs list.

 

[audreyh1]

Our new tax preparer is trying to talk us into e-filing rather than mailing our returns. I have read (accurately?) that most of the identity theft and false refunds hit people who e-file and not mail their returns. Reading the info WRT to the most recent scam, it appears this is not the case, but the result of preparers' computers getting hacked.

So, to e-file or not? Which is safer in your opinion?

No. Identity theft and false refunds hit people who mail their returns too. Not efiling does not protect you from being a victim of tax fraud.

 

[harley]

I use mail, but not because of fraud. I always owe, so what's the rush?

 

[jazz4cash]

The fraudulent return is usually efiled but that has nothing to do with how the taxpayer files. Our efiled returns always get rejected so I stopped trying and always do paper returns for Fed and iFile for state. We still had a fraudulent return filed on both Fed and State. The state caught the fraud and notified us. I also just learned that a phony return was filed for another state at the same time. Haven't lived there since '79! I would eFile if I could just for the convenience.

 

[audreyh1]

We try to always owe so we don’t have to deal with refund delays, but if our tax return is not accepted due to fraud I would still expect some major hassles and paperwork. So we try to file as soon as we can.

 

[Midpack]

I’ve eFiled Federal as long as it’s been an option, more than 10 years I’m sure. But I make sure we owe every year, always have, so there’s never a refund for a hacker to steal. I’ve screwed up twice and been due a small refund, this year actually, but our refund already hit checking last week so we’re already done with Federal for 2017. And I file as soon as I have all the info, but mail in what we owe just before the Apr deadline.

 

[foxfirev5]

Maybe a bit extreme but I always e file early even if I need to amend the return later. The first filing cuts off the fraudsters.

 

[gayl]

Always efile & get direct deposit, botched estimated taxes this year and getting 1/2 back. It's supposed to be there Friday

 

[jwkde]

You can still efile the return and then just mail in your payment with 1040-V payment voucher. Depending on how many pages your return is, you save the postage and some paper.


You can file anytime before the filing deadline and still not mail the check until the mid-April.

I use mail, but not because of fraud. I always owe, so what's the rush?

 

[gayl]

You can also pay later online at IRS2GO, same with state

 

[gauss]

efiling your return will prevent subsequent fraudsters that year efiling a bogus return in your name. The first one to file successfully, whether legitimate or not, will get the refund. You will not loose the refund if someone successfully files in your name before you do, however you will have to go through the IRS identity theft process and your return will be delayed.

If you are concerned about identity theft, my recommendation is to file credit freezes (ie the ones that you actually have to pay for) at the three credit bureaus. Beyond that just check your bank and CC statements in a timely fashion so that if there is a fraudulent transaction, the bank/CC company will be legally responsible for making you whole.

-gauss

 

[Corporateburnout]

Maybe a bit extreme but I always e file early even if I need to amend the return later. The first filing cuts off the fraudsters.

I always efile with no problems and never had to amend a return.

I efiled my daughter's taxes on February 7 after she assured me that she got all of her documents. Well, she forgot about a small job she helped a friend with and the W2 arrived late last week. I had to amend her return and she has to now mail 12 pages to the feds and 19 to the state for a measly $35 she owes the IRS and $14 to the state. Sometimes amending a return defeats the purpose of efile in my opinion.

 

[donheff]

You filing by mail won't prevent a fraudster beating you to the punch with an efile.

 

[USGrant1962]

I have read (accurately?) that most of the identity theft and false refunds hit people who e-file and not mail their returns.

As others have said, that is kind of backwards. Most false refunds are e-filed by thieves who stole your identity. You e-filing or mailing your return has nothing to do with it.

 

[sengsational]

You filing by mail won't prevent a fraudster beating you to the punch with an efile.

And I see it repeated often... whether your calculations leave you owing has nothing to do with the fraudster being less successful. The fraudster puts in plenty of withholding and makes the tax owed less. Your "real" numbers have zero to do with it.

 

[Midpack]

And I see it repeated often... whether your calculations leave you owing has nothing to do with the fraudster being less successful. The fraudster puts in plenty of withholding and makes the tax owed less. Your "real" numbers have zero to do with it.

Thanks, I owe and eFile as early as possible, but I was afraid that wasn't much protection. Is there anything one can do to thwart tax refund fraud?

 

[audreyh1]

You can still efile the return and then just mail in your payment with 1040-V payment voucher. Depending on how many pages your return is, you save the postage and some paper.


You can file anytime before the filing deadline and still not mail the check until the mid-April.

I efile early but schedule EFTPS to take out the payment on April 15.

 

[harley]

And I see it repeated often... whether your calculations leave you owing has nothing to do with the fraudster being less successful. The fraudster puts in plenty of withholding and makes the tax owed less. Your "real" numbers have zero to do with it.

That's useful information. But I'm not really worried about IRS fraud, that's their problem. Since I won't have a refund, any identity verification process won't be holding up a refund for me. It's good to see I can e-file and mail in the check or e-pay later. I do tend to wait on doing my taxes, as they are fairly complex and a royal PITA. But I can see that for others who get refunds filing early and trying to beat the fraudsters might be worth it.

I wonder what it's going to be like next year, with the new tax plan? I might have to pre-do my taxes just to make sure I'm not getting a refund under the new plan. If I do I'll have to do the whole e-file-early-and-beat-the-crooks process. I'm sure that after the first year I'll be able to work the numbers again so as to consistently not get one. But that first time might trip me up.

 

[audreyh1]

Thanks, I owe and eFile as early as possible, but I was afraid that wasn't much protection. Is there anything one can do to thwart tax refund fraud?

Other than credit freezes, which won’t necessarily protect you from tax fraud but might make it harder for someone to claim they are you if they contact the IRS and go through identity verification, early filing seems to be the best protection.

The IRS has stepped their end of it. Returns with refunds are more carefully scrutinized. And I believe they now verify against employer W2 data before giving refunds - employers are now required to supply W2 data much earlier to the IRS

If someone has your name, address and SS, they could still mess things up.

 

[audreyh1]

That's useful information. But I'm not really worried about IRS fraud, that's their problem. Since I won't have a refund, any identity verification process won't be holding up a refund for me. It's good to see I can e-file and mail in the check or e-pay later. I do tend to wait on doing my taxes, as they are fairly complex and a royal PITA. But I can see that for others who get refunds filing early and trying to beat the fraudsters might be worth it.

I wonder what it's going to be like next year, with the new tax plan? I might have to pre-do my taxes just to make sure I'm not getting a refund under the new plan. If I do I'll have to do the whole e-file-early-and-beat-the-crooks process. I'm sure that after the first year I'll be able to work the numbers again so as to consistently not get one. But that first time might trip me up.

What do you have to do if your efile is rejected? It then becomes your problem. You have to deal with it.

 

[harley]

What do you have to do if your efile is rejected? It then becomes your problem. You have to deal with it.

As I said, I don't ordinarily e-file, although I might next year. But if I mail in my taxes and the check and they reject it because of fraud, I've done my duty and they have the check. My only responsibility to the gov't is to pay the taxes I owe. I'll take my time going through the identity verification process, secure in the knowledge that I won't owe any more money or penalties since their lack of a secure process is the problem.

Having said that, I did do the process for getting DW and I pin numbers a couple of years ago. I haven't paid much attention to whether it's been breached, but at the time that was supposed to strengthen the process and keep the fraudsters at bay.

 

[LiveBelowMeans]

I have always paper filed. Use turbo tax, but paper file. My thinking, perhaps wrong, is that efiling makes it much easier for the government to audit. Paper requires effort on gov part. FYI, never been audited in 30 plus years. Jmho.

 

[Midpack]

I have always paper filed. Use turbo tax, but paper file. My thinking, perhaps wrong, is that efiling makes it much easier for the government to audit. Paper requires effort on gov part. FYI, never been audited in 30 plus years. Jmho.

I’ve eFiled for as long as it’s been available, and I’ve only been audited once - back when I was paper filing. I suspect what triggers an audit has little or nothing to do with how you file.

 

[cathy63]

I have always paper filed. Use turbo tax, but paper file. My thinking, perhaps wrong, is that efiling makes it much easier for the government to audit. Paper requires effort on gov part. FYI, never been audited in 30 plus years. Jmho.

Nope. It's just as easy for them to audit paper returns since they're all read by scanners and converted to an electronic format. The IRS even publishes a timeline for how long it takes for them to scan your paper return and make it available electronically: https://www.irs.gov/individuals/transcript-availability

If anything, a paper return is more likely to get audited due to a misread by the scanner causing a mismatch between your entries and the e-files the IRS receives from your employer and financial institutions. Statistically, very few people get audited randomly, and the percentages are getting smaller every year as Congress reduces funding; but a discrepancy in numbers that should match is not random and will get your return some human attention, even if it doesn't lead to a full audit.