As everyone may realize, identity theft has rapidly increased. The IRS is instituting procedures for tax software companies and preparers to verify a client's identity for tax returns that are being efiled.*
This verification isn't mandatory yet for the federal return, but some states are requiring it. As of now, Massachusetts is not one of the states, so I'm handling this on a state-by-state basis. **
If we're preparing a state return other than MA, please bring your driver's license or state ID card if we meet in person, or send me a pdf of it if we're preparing the return remotely. Without this procedure, it's possible states that require it might delay the processing of the tax return so yes, I will be verifying your ID if required, even when I know you! I'll enter basic information from the identication, as simple as that.
*IRS requires ID verification for claiming earned income credit with qualifying children. Additional documentation for EIC, head of household, tuition credit and child tax credit may be required.
**As of this posting, Alabama, New Mexico, New York and Ohio require ID verification. I'll discuss this requirement with clients at time of tax preparation if applicable.
Further note: IRS and some state tax agencies have stated that if they have any reservations about a taxpayer's direct deposit account, they may issue check-in-the-mail refunds instead.