The IRS and Authorized IRS e-file Providers share the responsibility of protecting IRS e-file from fraud and abuse. Providers should be proactive in detecting fraud and abuse. Providers have a major responsibility for the detection and prevention of IRS e-file fraud and abuse. Fraudulent and/or abusive practices should be reported to the IRS whenever detected. The full cooperation of e-file providers with any IRS investigation is expected. The Provider should furnish upon request any information and documents related to returns which IRS considers may be fraudulent or abusive.
Some examples of abusive or fraudulent are the following:
The e-file Provider detects multiple returns with the same address, or
Filing status questions are not satisfactory. They are ambiguous or do not answer the question that the tax preparer needs to be answered to determine appropriate filing status, or
Self-employed taxpayers do not provide satisfactory documentation to support claimed income and expenses.
A “fraudulent return”* is a return in which the individual is attempting to file using someone else’s name or SSN on the return or where the taxpayer is presenting documents or information that have no basis in fact. A “potentially abusive return”**
is a return the taxpayer is required to file but may contain inaccurate information and may lead to an understatement of a liability or an overstatement of a credit resulting in production of a refund to which the taxpayer may not be entitled.