Taxpayer Identity Theft: IRS v Massachusetts


by Alex Franch, Enrolled Agent

Recently, the Massachusetts Department Of Revenue (Mass DOR) announced some new tax fraud prevention tools. Let’s compare how Massachusetts Department of Revenue measures up to the big dogs at the IRS when it comes to Taxpayer identity theft. While e-filing continues to be the most convenient, most popular, quickest, and most secure method to file, it is also targeted most often by cyber criminals.

Preventive Measures

stopping cyber crimeYou can request a PIN from the IRS which they will send you letter with your PIN by mail. Without this PIN, you cannot e-file your tax return. Mass e-files typically require that a copy of the Federal return be attached depending on the system used, therefore, the IRS PIN does not necessarily protect you on Mass. A thief might be able to bypass both safeguards by paper filing but most of these crimes are cyber crimes. In my opinion, the IRS system seems to provide better safeguards from a preventive standpoint.

What if you become a victim?

If someone has filed a fraudulent IRS return with your name or Social Security Number (SSN), you will need to paper file with the IRS, along with an identity theft affidavit. This can delay your tax return for several months. This is a slow and frustrating process for most taxpayers. IRS online resources are very limited in this regard; on the other hand, they are already a very big target for cyber-crime. Pick your poison I suppose.

As I understand it, The Mass DOR’s new system in place would generate a letter (snail mail) and they would hold your refund. The letter would instruct you to go to the Mass DOR website and answer some questions. First, you are asked for the reference number from the letter, your name, and the last four of your Social Security Number. You would then be prompted with four questions to verify your identity. Answer three out of four of the questions, and you get your refund; you get two tries, three minutes each. If you fail twice you will have to take additional steps to verify your ID. It is unclear what additional steps are needed to verify your Identification.

In addition to actual cases of cyber crime, the IRS and Mass DOR both use algorithms to flag tax returns in this manner. Regardless if it is a cyber crime or dragnet, I suppose you are a victim either way.


The Mass DOR system processes faster than the IRS, if you need a speedy resolution; however, the IRS has a more proactive system. Mass DOR does not mention what the four questions are, supposedly making it more difficult for the cyber thieves. However, this can make these questions difficult for an honest person to answer and put you on the spot. (Here is my question, how does the Mass DOR know my pet’s name anyway?) Finally, heaven help me if my parents get swept up in this dragnet and I have to help them navigate through the Mass DOR website. We all know how challenging this can be for you and I, but what about the elderly themselves who may not be so quick in their memory or someone helping the elderly who may need answers quickly?

If you have experienced the Mass DOR system or IRS process, please feel free to share your experience below or go to our Facebook or Google+ page.

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For more information, call Alex Franch at 781.789.7200. WorthTax has locations in Norwell, Dedham, and Weymouth, Massachussetts.
Alex Franch

Mr. Franch is a Tax Specialist and Partner at Joseph Cahill & Associates / WorthTax. He has a diverse background including a Bachelor of Science from Boston College in Mathematics and extensive military service. Mr. Franch is an Enrolled Agent and has eight years of tax preparation experience. He has been serving individuals, families, and businesses for several years with tax and financial planning strategies and is a junior partner with the firm. Mr. Franch is licensed by the Financial Industry Regulatory Authority (FINRA) with a Series 6, 63, 65, and 7, and by the Commonwealth of Massachusetts Division of Insurance.