Alabama Trying Pop Quizzes to Prevent Identity Theft Refunds

An AP Story notes that states are also trying to crack down on identity theft tax refunds. Alabama will be trying pop quizzes. No, not the pop quizzes you had in school but questions related to your identity (e.g. Did you live on Main Street?) that only you would know.

Individuals with unusual returns will receive a letter in the mail asking them to go to an Internet website (or call the Alabama Department of Revenue) so that they can take the quiz. Once returns ‘pass,’ the refunds will be processed. The system is provided by LexisNexis.

While the story does not note what would cause a return to be unusual, I suspect the Alabama Department of Revenue has implemented a version of my modest proposal on identity theft: If the return’s address (or bank account for direct deposit) doesn’t match the prior year’s return, the quiz is sent.

Kudos to the Alabama Department of Revenue for trying this. While the Alabama Department of Revenue noted that they stopped $18 million of identity theft-related refunds in 2012 (the 2013 total is not yet available), undoubtedly many were processed. This seems like a relatively simple process that should stop many identity theft-related refunds.

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