IRS unveils new cyber safeguards

The Internal Revenue Service (IRS) is implementing new cybersecurity initiatives for 2017 to stay ahead of hackers.

The agency is expanding a pilot program to add 16-digit verification codes to W-2 forms, which are used to report wage and tax information.

{mosads}The IRS is also expanding its information campaigns to teach the public about tax safety and is ramping up research and the use of data to protect taxpayers. Those efforts will include the launch of an information-sharing program to help prevent future threats.

“The bottom line for taxpayers is that the IRS and the states, with the help of the tax industry, are stopping more suspicious tax returns at the door, and we’re preventing more fraudulent refunds from being issued,” said IRS Commissioner John Koskinen at the IRS Security Summit Tuesday.

The moves come a day after the IRS announced it would no longer use its embattled e-File PIN system to protect taxpayer security.

In February, the IRS said hackers had used stolen Social Security numbers and a program to guess PINs to steal 100,000 taxpayer logins. The IRS was able to eventually stop the hack.

The agency added new protections but noticed a similar uptick in such attacks last week, leading it to eliminate PIN numbers as a security safeguard. Online users now must use information from prior tax returns.

Despite the widely publicized attacks, complaints about identity theft are down “significantly” — as much as 40 percent. The IRS claims to have stopped $1.1 billion in fraud this year, up $350 million from the year prior.

Agency officials are vowing to stay vigilant. 

“The minute we declare success is the minute we lose,” said Koskinen.