Wednesday, August 28, 2013

$5B Loss - IRS Needs Improved Refund Fraud Detection

US Internal Revenue Service (IRS) efforts are lagging for a key software program upgrade to prevent the growing problem of tax fraud schemes. Therefore companies and organizations, often the source of stolen identity data used for tax fraud, need to be even more vigilant and proactive regarding ID theft detection.

An estimated $5 billion a year is lost to identity theft refund fraud which typically involves using stolen names and Social Security numbers to file bogus returns. The IRS says updating their "Return Review Program" (RRP) software needs to be completed by January 2015 to replace the current, and increasingly outdated, refund fraud systems.

"There is limited assurance that RRP systems development activities will achieve expected benefits or meet time-sensitive business and information technology requirements for addressing the IRS's evolving tax refund fraud risks."
- Treasury Inspector General for Tax Administration Report
However, the Treasury Inspector General for Tax administration reports there is "limited assurance" the RRP will "achieve expected benefits" to address the IRS's tax refund fraud risks. Thus individuals as well as organizations should be more vigilant about protecting against identity theft that can increase tax refund fraud.

Many of these tax fraud schemes are feed with patient identities stolen by insiders at healthcare organizations. These breaches of their patients' private information often first comes to their attention from law enforcement, rather than internal breach detection programs. Healthcare organizations can utilize low-cost on-demand SaaS analytics to proactively detect privacy data breaches which would contribute to fewer stolen identities falling into the hands of criminals.

Download a white paper on patient privacy breach detection. Learn how to proactively identify unauthorized breaches of patient data privacy, even by authorized users - with no hardware and no on-site software.
(a) IRS lags in program to spot tax refund fraud: watchdog - Reuters, 08/26/2013

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