Georgia fights tax fraud with identity-based filters

Georgia is using the LexisNexis Tax Refund Investigative Solution in a pilot program to mitigate identity fraud.

The program was launched in January and uses identity verification and authentication tools to detect and prevent potentially fraudulent tax returns. Georgia officials have awarded LexisNexis a contract to continue the effort.

The pilot program, which detected that 2 percent of all returns filed were potentially fraudulent, is part of the state’s comprehensive anti-fraud program, which stopped millions of dollars in fraudulent returns in 2011, state officials said.

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"Tax refund fraud is a growing problem nationwide, and increasingly it is perpetrated by criminals who steal the identities of innocent taxpayers and then submit returns requesting refunds before the real taxpayer has a chance to do so,” said Doug MacGinnitie, commissioner of the Georgia Department of Revenue.

During the pilot program, Georgia tax officials used identity-based filters, which screened tax refund requests against billions of LexisNexis identity records collected from public databases and commercial sources.

When a returned record is flagged with a fraud indicator, the individual is asked to answer a series of identity authentication questions that only a person with authentic, personal knowledge can answer. The authentication questions were securely integrated into Georgia’s Revenue Department’s website and customer service center, officials said.

To find fraud before it happens, government agencies must be able to access records across city, county and state boundaries, LexisNexis officials said. The Tax Refund Investigative Solution lets agencies access billions of public record sources to establish identity-based filters.

Identity-based filters can uncover categories such as:

  • People who have died.
  • Altered Social Security numbers, changed to elude to Do Not Pay lists.
  • People not associated with the given address they list.
  • People not associated with the Social Security number they list.
  • Identities not found in public-records searches.
  • People incarcerated in prisons.

About the Author

Rutrell Yasin is is a freelance technology writer for GCN.


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