Some Indiana taxpayers facing ID test for refunds

4/24/2014

SOUTH BEND, Ind.  — Some Indiana taxpayers are being asked to take an online quiz to prove their identities before the Department of Revenue issues their state tax returns as part of an effort to combat the growing problem of criminals trying to steal tax returns.

The revenue department added the security step after discovering about 1,500 attempts to try to file fraudulent tax returns in Indiana last year, spokesman Bob Dittmer said. The state has contracted with Lexis-Nexis to check whether basic identity information provided by taxpayers due refunds matches information on various databases.

“They’re able to tell us whether or not an identity we’ve sent to them is definitely who they say they are, probably aren’t who they say they are or they’re not sure,” Dittmer said.

The returns for people identified as “not sure” are the only ones being asked to take the identity quiz, Ditmer said. Fewer than 5 percent of people receiving returns will be asked to take the quiz. Cases suspected of being fraudulent are turned over to the revenue department’s special investigations unit.

The revenue department so far this year said it has stopped more than 2,000 attempts by people seeking to claim $3.7 million in refunds, Dittmer said.

Among the things that could lead to people’s identities being questioned are a change in address or other discrepancies in information, Dittmer said.

People whose identities are questioned receive a letter asking them go to a web site to take the identity quiz. When people log in they must submit their Social Security number and the amount of refund they are expecting to receive. They then have three minutes to answer four questions that can include information about where they’ve lived, vehicles they’ve owned and when they were born. People who get at least three questions correct pass the test. Those who fail the quiz twice are asked to call the Department of Revenue.

Dittmer said it takes Lexis-Nexis 24 hours to check the returns and let the state know the status, and the state mails out letters notifying taxpayers who need to take the quiz.

“So there’s really no delay in terms of processing returns,” he said.

Dittmer said he’s unaware of any taxpayers calling to complain about having the test, although he said some have called to see whether it is legitimate or an attempt by someone to steal their personal information.