Archive for the ‘Alabama’ Category

Alabama Trying Pop Quizzes to Prevent Identity Theft Refunds

Sunday, November 9th, 2014

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.

Alabama Adds Tax Appeals Commission

Sunday, May 20th, 2012

Great Seal of Alabama

In what appears to be a case of everyone being happy, the Alabama legislature with near unanimity (just one ‘no’ vote in both houses of the legislature) approved the new Alabama Tax Appeals Commission. The measure still must be signed off by Governor Robert Bentley.

The new Commission will hear tax appeals, including sales and rental taxes (though cities can opt out). The Commission is expected to save money for both the state and taxpayers–that sounds like a huge win-win. The bill authorizing the Commission also includes conformity provisions to federal tax law.

As J. Wray Pearce, a CPA, told, “will make tax filing simpler for everyone, more effective and less expensive…The independent tax tribunal should make needed appeals easier, and reduce the time required to get resolution.”