IRS May Shift W-2 Deadlines to Combat Identity Theft and Tax Fraud

The Internal Revenue Service is being urged to move up its W-2 filing deadline to January 31 and to lower the threshold for requiring electronic filing of W-2 returns in an effort to curb the growing trend of identity theft related tax fraud.

A new report from the Government Accountability Office suggested that additional actions such as these could help the IRS combat the threat of tax refund fraud. Based on a preliminary analysis, the IRS estimates it paid $5.2 billion in fraudulent identity theft refunds in the 2013 filing season, while preventing $24.2 billion in such refunds, based on what it could detect. The full extent of the fraudulent refunds is unknown, however, because of the challenges endemic in detecting identity theft-related refund fraud.