This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Someone once said the No. 1 rule of thieves is that nothing is too small to steal. That point was driven home hard this past year at the State Tax Commission, where protecting people's identities and preventing fraud as we collect taxes remains our top priority.
Whether you're a high school student just entering the workforce or a Fortune 500 multi-billion dollar corporation, protecting your identity from potential fraudsters is crucial. In today's technical world of electronic financing, sophisticated fraudsters are online 24 hours a day, 7 days a week, 365 days a year attempting to steal identities, quietly accessing bank accounts and pocketing hard-earned dollars.
These thieves use complex tactics to access innocent people's identities and bank account information. Once stolen, these thieves file fake income tax returns, diverting the unsuspecting victim's refunds to their accounts. Last year thieves attempted to steal more than $11 million in Utah income tax refunds. Fortunately all but a tiny fraction of that amount was protected.
The Utah Legislature clearly recognized the importance of combatting this onslaught of identity theft and income tax fraud by approving a new law last year. Significant changes were made impacting all Utah employers when filing withholding documents for employers. It applies to all employers, whether a newly opened home business or a major corporation. Under the law, the 80,000 Utah employers were required to electronically file W-2 and other forms by Jan. 31. The state then matches those documents filed by employers with taxpayer information and verifies identities before sending tax refunds. The new law directly impacted 53 percent of Utah's 80,000 businesses, those who previously filed withholding information manually.
Initial reports show that 93.2 percent of employers complied with the new electronically filing requirements by the filing deadline, which represents approximately 2.3 million W-2s and 1099s. Although this dramatic change in the law inconvenienced many employers and tax preparers, citizens' identities are protected and further fraud thwarted.
The Tax Commission credits the business community and public agencies for helping obtain such a high percentage of Utah businesses meeting the required deadline. For example, the state's Department of Workforce Services included information in their newsletter. The Utah Association of Certified Public Accountants cooperated by sending information to its members and co-sponsoring training sessions with its members. Word-of-mouth among Utah's accountants and tax preparers also served as a driving force in the getting the message to business owners.
Last year, Utah led the effort thwarting a nationwide scheme to steal money from taxpayers. Many states lost millions of dollars and the federal government reported losing $5.8 billion. Because of early aggressive action taken, Utah lost $19,580 to fraudsters. While we aim for zero, credit our highly skilled employees using sophisticated computer systems for early detection last year of fraudulent attempts. For the past year, Tax Commission employees worked hand-in-hand with tax software providers and the Internal Revenue Service in the ongoing battle to protect taxpayers' personal and financial information.
We know this war against ruthless thieves will continue as technology advances and schemes become more complicated. We at the Tax Commission pledge using all available resources to protect your identity and your dollars from unscrupulous thieves.
John L. Valentine is chairman of the Utah State Tax Commission.