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IRS announces new security measures to protect taxpayers from identity theft, tax refund fraud

20 elements identified that tax filers can share to authenticate, detect identity

PEMBROKE PARK, Fla. – The holiday season is coming and so is the start of tax season. More than 250 million households file tax returns, and 90 percent of those returns are filed on a computer. That means identity theft is a real threat to everyone. The IRS announced new identity theft protections taxpayers will be using filing tax returns in 2016.

In a news conference Thursday, IRS Commissioner John Koskinen, along with state tax administrators and leaders in the tax preparation field announced a new effort: "Taxes-Security-Together" expanding and strengthening protections against identity theft and tax refund fraud for the upcoming tax filing season. The enhanced security measures came out of a Security Summit held earlier this year.

[READ: Tips from the IRS]

"Refund fraud caused by identity theft has recently become a more serious and complicated threat," Koskinen said. "Increasingly, these crimes are being perpetrated by sophisticated, organized syndicates. They've been able to gather almost unimaginable amounts of personal data from sources outside the IRS. They use this data to file fraudulent federal and state tax income returns, and claim huge refund."

The Security Summit identified 20 new data elements that tax filers can share at the time of filing with the IRS and states to help authenticate a taxpayer and detect identity theft refund fraud beginning with the 2016 tax filing season.

The new security measures will help detect and prevent identity theft when filing tax returns. They feature enhanced identity requirements and validation procedures to protect accounts from identity theft. Some of those include new password standards requiring a minimum of eight characters using upper and lower case, alpha, numerical and special characters, a timed lockout feature, limiting unsuccessful login attempts, and sending verification emails or texting a PIN to tax filers.

"The holiday season is approaching. Tax season is coming up," Koskinen said. "People are online, people are getting new devices. It's an incredibly busy period involving huge amounts of financial and tax data being shared. People need to be aware of steps they can take."

Getting out the message is important. The IRS will be issuing weekly tax tips to taxpayers beginning next week. They have also updated several publications for taxpayers and tax professional as well as releasing YouTube videos. The IRS will also share the information on www.irs.gov.

"It's clear that when it comes to identity theft, we all have a part to play," Koskinen said.

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