Efforts Continue to Result in Improved Identification of Fraudulent Tax Returns Involving Identity Theft; However, Accuracy of Measures Needs Improvement

The Commissioner, Wage and Investment Division, should expand the use of the Return Review Program (RRP) identity theft models to include all accelerated Forms W-2, Wage and Tax Statement, information for comparison to tax returns at the time they are processed for identity theft detection and to exclude, from identity theft treatment, tax returns where the income information matched.

The Commissioner, Wage and Investment Division, should: Develop criteria to identify and evaluate for fraud potential tax returns *****************2**************************************

The Commissioner, Wage and Investment Division, should develop a process to timely use State lead data as another characteristic in evaluating tax returns during processing to identify potential identity theft tax returns.

The Commissioner, Wage and Investment Division, should use actual tax return data to identify the refund amount associated with e-filed rejected tax returns when computing revenue protected, exclude rejected e-filed tax returns that do not claim a refund, and accurately account for tax returns with multiple reject reasons.

The Commissioner, Wage and Investment Division, should review both the protected and unprotected revenue to ensure that duplicated tax returns are removed.