With more taxpayers e-filing, taxation and revenue agencies must be hypervigilant for fraudulent tax returns requesting tax refunds. Stealing tax refunds doesn't require personal contact with victims. Identity thieves, using stolen or invented identities, simply e-file fake returns at the beginning of tax season. They receive their requested refunds via mail or direct deposit usually in a matter of weeks.
The fraudulent tax return and resulting refund aren’t detected until and unless a legitimate taxpayer files a return, which the tax and revenue agency then rejects as a duplicate. By that time, it’s usually too late to go after the thief. The tax refund money can’t be recovered. The error is costly to the agency, which must then unravel the situation and ultimately give the legitimate taxpayer their refund.
Equally concerning is the cost to the agency’s reputation. Identity theft is a frustrating, complicated process for victims. While identity thieves steal information from sources outside the tax system, the tax and revenue agency is often the first to inform a victim that identity theft has occurred. Agencies need to do everything in their power to prevent identity theft and keep fraudulent tax returns and refunds from being processed.
Because taxpayers expect their tax return to be processed and the refund sent in a timely manner, tax and revenue agencies need a fast, simple way to differentiate legitimate taxpayer returns from fraudulent ones before sending a tax refund.
LexisNexis® Geotriangulation Risk Assessment is an easy-to-apply solution that assesses a tax refund request for fraud risk. It uses geolocation of pertinent data to compare the taxpayer’s mailing address with their IP address and the location of the bank where the government agency is asked to send the refund money.
If those addresses don’t match up, Geotriangulation flags the credentials as potentially stolen or fake. The return isn’t processed and the refund isn’t sent until the agency has further researched the filer to confirm their legitimacy.
Geotriangulation is invisible to taxpayers but can be invaluable in helping taxation and revenue agencies fight against stolen identity refund fraud by authenticating the taxpayer’s identity and the validity of the tax return at the time of filing.
Geotriangulation Risk Assessment benefits taxation and revenue agencies as well as taxpayers. The agencies prevent revenue loss by not paying refunds on fraudulent returns. Taxpayers don’t have to be concerned that a criminal has already filed a return in their name and received the refund they’re rightly due.
Additionally, Geotriangulation helps streamline payments to legitimate taxpayers. The faster agencies can verify the identity of a taxpayer, the sooner they can process the refund.
LexisNexis® Risk Solutions leverages its vast databases and proprietary analytics to identify suspicious tax returns through the comparison of geographic data. Geotriangulation Risk Assessment is a non-FCRA batch solution. It provides taxation and revenue agencies with answers regarding fraud risk in a matter of hours.
Geotriangulation can be used as a single, stand-alone product or in combination with a post-processing tax refund, fraud prevention solution.
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