Pa. — The Pennsylvania Department of Revenue saved taxpayers
approximately $29.3 million in the last fiscal year by improving the process it
uses to prevent the issuance of fraudulent and erroneous tax refunds, Revenue
Secretary Dan Hassell announced today. An estimated $80.5 million will be saved
over four years.
“As a department that processes more than six million
personal income tax returns each year, we must defend against cybercriminals trying
to file fraudulent returns and take extra steps to examine returns that are
inaccurate,” Secretary Hassell said today at a news conference in the Capitol
Media Center. “We are proud to have saved the General Fund nearly $30 million
and to help those who are victims of tax identify theft.”
The department achieved the savings in part by
renegotiating a software contract that helps identify and prevent fraudulent and
erroneous tax returns. The new contract also allowed the department to expand
its reviews to more types of tax returns while reducing the cost of its system.
In the 2016-17 fiscal year, the department’s review
process prevented the issuance of approximately $23.7 million in refunds that
were fraudulent, erroneously filed or in need of adjustment. An additional $5.6
million was saved by renegotiating the software contract and reassigning
existing department staff to create a Fraud Investigation Unit that focuses on
assisting victims of identity theft and combating tax refund fraud.
Established in 2016, the Fraud Investigation Unit has
partnered with state and federal tax administrators to address the rise in fraudulent
tax returns filed by scammers. Armed with new analytical tools provided by the
renegotiated software contract, the unit also has helped the department
strengthen its automated fraud filters, which intercept fraudulent and
erroneous refund filings. These filings mainly contain overstated expenses and
incorrectly reported wages or withholding from W-2s.
So far this year, more than 61,000 personal income tax
returns have been flagged for review. For comparison, the department flagged 31,336
in 2016, 8,521 in 2015 and 1,132 in 2014.
In addition to those savings, the department now has the capability
to deploy identity verification quizzes that assist taxpayers in confirming
their identities online. The department has sent more than 56,000 identity
validation letters to taxpayers in 2017 to date.
“These new procedures are helping us assist victims of
identity theft and combat tax refund fraud in a more cost effective manner,”
the department continues to detect and prevent more attempts at fraud,
taxpayers also should take further steps to protect themselves, Secretary
the holiday shopping season underway and the tax filing season approaching, Hassell
encouraged taxpayers to take extra precautions to protect their information and
identities. Here are some helpful tips:
- Use security software
with firewall and anti-virus protections.
- To protect against
malicious software, allow security software to update automatically. These
routine updates help to guard your electronic device against constantly
- Make sure to use secure
wireless networks when accessing the internet. If a Wi-Fi network is
unsecure, taxpayers put themselves at greater risk of having their
information stolen by criminals. Be sure to create a password and always
encrypt your wireless network.
- Develop unique eight or
more character passwords, mixing letters, numbers and special characters.
Passwords should vary from other accounts and should never use your name,
birthday or common words.
- Beware of phishing emails
purporting to be from your financial institution or a tax software
company. A link may take you to a fake website that is designed to steal
your log-on information. The attachment you open may include a program
that allows a cyber-thief to get access to sensitive files on your
- If you like to file your
return online, start at www.revenue.pa.gov or
at IRS.gov. If you like to file using installed software, buy your
software from a trusted retailer, or by going directly (not clicking a
link) to your preferred software company’s website. If you use an
accountant, make sure it’s someone you know will be available after the
filing deadline date. Do not let any preparer take your refund and then
pay you directly.
If a scammer used your identity to claim a Pennsylvania
tax refund, contact the Department of Revenue’s Fraud Investigation Unit at
717-772-9297 or by email at Rafirstname.lastname@example.org.
Since 2015, state agencies have already
saved more than $373 million as part of Governor Wolf’s GO-TIME initiative,
which aims to provide $500 million in savings by 2020. To learn more about GO-TIME, visit www.governor.pa.gov/go-time.
more information regarding the Pennsylvania Department of Revenue, visit www.revenue.pa.gov, or
follow the department on Facebook.
MEDIA CONTACTS: Jeffrey
Johnson, 717-787-6960, Department of Revenue
Dan Egan, 717-772-4237, Office of Administration/GO-TIME