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volume 9 • spring 2016
for us to detect and investigate potential fraud or abnormalities,” he adds.
Payment providers play a key role in another notable public- private anti-fraud cooperation, the External Leads Program. Under the initiative, nancial institutions and other third- party providers share leads re- garding suspected fraud with the IRS and, in some cases, electronically reject suspicious
refunds and return the funds
to the IRS. Since being estab- lished in 2010, the External Leads Program has grown from 10 partner nancial institutions to several hundred. In the 2014 tax ling season, more than 350 sources sent the IRS successful leads for nearly 94,000 taxpayer accounts (leads were for all types of refund fraud, not just ID theft fraud), and returned $214.8 mil- lion in fraudulent refunds, the agency reports.
While progress is being made
to combat the problem of ID theft tax refund fraud, criminals are constantly honing their tactics and probing for weaknesses in the system—and stopping them will require the IRS and payment providers working together to do the same, notes Landry. “Perpetra- tors are going to continue to change and look for new methods; that’s their job,” he says. “So we have to continue to evolve and innovate to stop them.”
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