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Dept. of Revenue starts taxpayer survey to prevent fraud

Published On: Jan 16 2014 06:57:35 AM CST   Updated On: Jan 16 2014 03:38:14 PM CST


The Wisconsin Department of Revenue is starting to quiz taxpayers to protect their returns and personal information.

DOR Secretary Richard Chandler said the idea came from other states that have put their own steps in place to prevent tax fraud and identity theft.

“It's quick, it's easy, but it makes sure that we're dealing with a legitimate taxpayer,” Chandler said.

Chandler said the department will identify risk of fraud based on analytic information.  He said the state will start sending letters to those people whose Social Security numbers they think might be stolen and returns compromised. 

That letter will ask taxpayers to complete a survey online or over the phone.  Chandler said those questions will help verify that the person who cashed in the tax refund is the one to whom it rightfully belongs.

“We're being very careful to base this on objective analytic data, so we make a very strong effort here to make sure that we're not making decisions about how we treat taxpayers based on any prohibited factors, such as gender, race, political affiliation, or things like that,” Chandler said.  

While Chandler couldn’t disclose what kinds of questions would be asked, he said they will be ones that only each individual taxpayer could answer correctly.

“They're the type of questions that would be asked by their bank or credit card company that the people are accustomed to,” Chandler said.

Chandler estimated the state will save $10 million in what are now fraudulent tax refunds.

“We don't want to send out fraudulent refunds that cost the state money, and ultimately, that comes from all of the taxpayers,” Chandler said.

Accountant Marshall Mennenga, who runs Mennenga Tax and Financial, said a handful of his clients experience tax fraud every year.

“Yes, it is a very big problem,”Mennenga said, “and I think that what the IRS and Wisconsin Revenue need to do is slow down the process.  Slow down the refunds.”

Mennenga added keeping your personal information under wraps and filing your taxes as early as possible can help prevent identity theft and fraud.

“If you've already filed, you got there first with your social security number.  You're first in line,” Mennenga said.  “You get your refund, your real refund.”

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