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.

About the Author(s)
Jim is a Principal in the Tax Advisory Group in the Youngstown, Ohio office of HBK CPAs & Consultants and has been with the firm since 1986. He has extensive experience in personal and estate planning, charitable planning, tax-exempt organizations and individual tax and financial planning. Jim earned a Bachelor of Science degree in Business Administration for the University of Toledo and the Personal Financial Specialist (PFS) designation, which is awarded by the American Institute of Certified Public Accountants to recognize CPAs who provide financial planning service. Jim also has experience in tax policies, procedures and resources, which HBK uses in their tax practices. He provides counsel to high-net worth individuals throughout HBK. He is one of the firm’s preeminent presenters and specializes in addressing business owners and individuals on topics such as the Affordable Care Act, Shale energy planning, charitable giving opportunities, estate and gift planning and exempt organization issues.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.