Has the estimated 5-billion dollar per year problem of tax refund fraud just been solved? You be the judge. The Tax Refund Vault leverages the security and authentication infrastructure of banks and credit bureaus to protect all tax returns. By limiting access to refunds through banks and by using a tax return's unique fingerprint of data, a whole new method of protecting tax refunds, and possibly all sorts of accounts payable documents, has been invented. The solution works like a combination lock or safety deposit box key to safeguard all tax refunds. Citizens would be able to unlock their refunds in just seconds while conducting their normal banking activities, or for those without a bank account, while checking their annual credit report.
The Tax Refund Vault
A recent article by Forbes summarizes the growing problem of tax return fraud:
“According to Congress’ Government Accountability Office, the IRS detected 642,000 cases of identity theft in the first nine months of 2012, up from 242,000 in all of 2011 . . . the Treasury Inspector General for tax Administration estimated in July that 1.5 million bogus returns claiming $5.2 billion in refunds are getting through a year . . . the fraudsters are exploiting the fact that the IRS doesn’t process the W-2s and 1099s it gets for taxpayers until well after it pays out refunds.”
Once built, all tax returns for state and federal returns could be automatically protected without requiring citizens to sign up in order to protect their returns. This solution places your tax refund into a ‘Virtual Safety Deposit Box’. Once a platform is developed and banks have connected to the solution via API, all tax returns will be protected.
How it Works
Step 1) Tax filers login to IRS site through their online bank or while at bank branch (banks have already verified their customers identification and make the perfect distribution and security channel – a knowledge based questionnaire could also be performed by credit bureaus for those without bank accounts or used for secondary fraud screening - consumers could also pre-register with the IRS through their bank to safeguard their tax refund).
Step 2) Filers select a form to file and the tax period.
Step 3) Filers are asked to enter numeric values from 3- 5 fields from their prepared tax return (the software program generates 3-5 fields that must be filled out for this form, are numeric and unique in value for each form).
Step 4) Filers file return via e-file or regular mail.
Step 5) The IRS would not process a tax return or refund that has not been registered through steps 1-4 or does not match up with the one received in comparison to steps 1-4.
Simple, the media just needs to report on this innovation and a congressman or senator needs to draft and present legislation. This system could also save millions of dollars and hours per year in the time spent processing fraudulent returns.
Allow me to step up on my soap box. Without the financial and technology media picking up this story, it may never be distributed by the mainstream media. So the baton is handed off. Saving billions a year in tax fraud and protecting our individual refunds is up to you, the media, our voice for liberty.