Survey: More taxpayers willing to confirm ID, answer more questions to combat tax fraud

A survey from H&R Block, the world’s largest consumer tax services provider, found that 96 percent of consumers are willing to take action to combat tax fraud. Some of the top responses include answering additional questions on their returns, providing additional documentation, using a professional tax preparer who is regulated by the IRS and answering questions to confirm their identity when using do-it-yourself software or websites.

“We believe challenging suspicious activity – before returns get to the IRS – is the right thing to do,” said Bill Cobb, H&R Block president and CEO. “Consumers agree.”

H&R Block’s survey was designed to ensure the consumers also had a voice in the debate being waged to combat tax fraud. This is the second year for the survey, conducted by The Tax Institute at H&R Block and ORC International, which shows an increase in taxpayer willingness to engage from a 2014 survey.

“Tax fraud and improper payments are at least a $20 billion problem. Whether they file their taxes with a tax preparer or with do-it-yourself software, consumers believe that tax preparers, software providers, government and they themselves have responsibility to solve this problem,” said Kathy Pickering, executive director of The Tax Institute. “For their part, they are willing to take several actions including confirming their identity and answering more questions.”

Consumers echo solutions offered by H&R Block

The results of the survey are encouraging and demonstrate consumer appetite for additional steps from the industry and government to protect against this growing threat. The company supports making sure consumers are protected through fair, transparent and commonsense solutions that can be enacted now. Specifically, H&R Block supports implementing consistent anti-fraud measures across all tax preparation methods and setting national standards for professional tax return preparers.

“At H&R Block, we believe in doing the right thing,” Cobb said. “We, like consumers, are willing and able to do more and believe government has to establish uniform, industry-wide standards to which we all must rise.”

H&R Block is leading the charge to combat tax fraud in both online and assisted tax preparation industries. In addition, H&R Block introduced the Tax Identity Shield ^SM this year to offer tools, resources and assistance designed to help reduce risk, promote awareness and mitigate fallout, including assistance with restoration of the consumer’s tax identity.

Key findings

1. Consumers understand they have a role to play in combatting tax fraud. They agreed that the IRS, Congress, professional tax preparers, the makers of DIY tax preparation software and taxpayers themselves all have a responsibility to address fraudulent tax filings.
2. Consumers believe that fraudulent returns are most likely to originate from DIY tax preparation software or websites. The percentage of people who believe this grew 14 percentage points from last year (68 percent vs. 54 percent).
3. Consumers who use a professional tax preparer want to know that tax preparers have met minimum training standards. Among the 63 percent of respondents who use a professional tax preparer, 90 percent support requiring tax preparers to meet minimum training standards. This is consistent with last year’s findings of 89 percent.
4. Consumers support consistent filing requirements, regardless of how they file their taxes. Eighty-eight percent (88 percent) of all respondents support requiring tax forms and documentation requirements to be the same whether using a professional tax preparer or DIY software/website. That is consistent with last year’s finding of 86 percent.
5. Consumers who prepare and file their own tax returns support requiring minimum standards for DIY tax preparation software/websites. Among the 30 percent of respondents who use DIY tax preparation software, 92 percent support requiring DIY tax preparation software/websites to meet minimum standards. This is consistent with last year’s findings of 91 percent.

The full survey results for 2014 and 2015 are available by visiting H&R Block’s newsroom at https://www.hrblock.com/tax-center/newsroom or at the following links:

Consumer Tax Fraud: Sources & Solutions Survey Findings March 2015
Consumer Tax Fraud: Sources & Solutions Survey Findings March 2014

Note: references to last year’s data refers to a Tax Institute at H&R Block survey fielded in November 2013 and released in March 2014.