State updates software in attempt to stem rising tax fraud

The Louisiana Department of Revenue says it has taken steps to combat an increasing number of tax fraud cases, which it links to rising electronic filing. Federal and state income tax returns are being accepted beginning today, and most early filers will likely take to the Internet to submit theirs. Last year, 80% of federal returns were filed electronically across the United States, according to department figures, and in Louisiana electronic filing has risen by 58% since 2007. “With the increase in electronic filing, tax fraud has skyrocketed,” reads an LDR statement released today. “At the federal level, tax fraud remains the third largest theft of federal funds and has risen to a record 1.1 million cases in 2011. … Tax fraud cases in Louisiana directly discovered as a result of current theft protection measures have risen to almost 23,000 cases in 2012.” In coordination with the Internal Revenue Service, LDR says it recently developed a new “customized Louisiana-specific fraud protection computer interface.” All returns received today and beyond will be subject to a new identity verification system, LDR says. Those who file returns deemed questionable will be directed to a customized online data test or a telephone survey to verify their identity.