States Continue to Expand Efforts to Avoid Identity Theft

Driver’s License Information May be Required to E-file State Tax Returns

States are taking additional steps to protect taxpayers’ identity to combat stolen identity tax fraud. For 2016 tax returns, Ohio, New York, and Alabama will require driver’s license or state identification card information to be provided in order to e-file. This information will include the license number, the date issued, the expiration date, and the state of issuance.

Other states, such as California, Kansas, and Wisconsin request, but do not require, driver’s license or state issued identification card information when completing tax returns. Providing this information may allow the state tax returns to be processed more quickly or help confirm a person’s identity if their identity is stolen.

We expect most, if not all, states will eventually require driver’s license information or other personal data to confirm a person’s identity.

In addition, many states also require certain taxpayers to pass an online or telephone identity confirmation quiz in order to have a refund claim processed. For example, Ohio has an Identity Confirmation Quiz, which requires three out of four questions to be answered correctly to pass. The questions are about personal information, such as streets and cities lived in the past. Ohio requires taxpayers to take the identity quiz within 30 days of receipt of the notification letter. If a taxpayer fails the quiz or does not take it within 30 days, then Ohio requires certain supporting information to be provided to process the refund. Other states have similar identity test programs.

Please contact a member of our firm if you have questions or concerns about protecting your identity.