The issue of refund fraud is always a topic of great importance to tax pros and is never far from the headlines. The GAO is pushing the IRS to move the deadline for filing W-2s up to January 31st and also to increase electronic filing of W-2s in an effort to stop fraudulent refunds from being filed. The logic behind this is that if the IRS had earlier access to W-2s they would be able to verify income amounts reported on tax returns. Currently employer wage data is not available until months after refunds are issued making it impossible to verify reported income amounts.
In the aforementioned report the GAO recommends Congress provide the Treasury with authority to lower the annual threshold for e-filing W-2s and evaluate the impact of moving the W-2 deadline forward. The GAO states that Congress “neither agreed nor disagreed with GAO’s recommendations, and it stated it is determining how these potential corrective actions align with available resources and IRS priorities.” The GAO’s stated goal is to reduce the amount of refund fraud which they explain is largely unquantifiable at the current time.
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