June 23, 2016
WASHINGTON — As part of a wider effort to protect taxpayer information and strengthen authentication standards, the Internal Revenue Service is putting in place new requirements for participants using the Income Verification Express Service (IVES), a service supporting the lending industry to verify loan applicant’s incomes.
The new requirements will help further ensure IVES participants verify and validate their clients using the system. The IVES service is used by pre-screened companies who, in turn, are hired by clients such as mortgage firms and loan companies who need to verify applicants’ income.
The IRS is working with the IVES participants to help ensure a smooth transition to the stronger validation rules. These new requirements are being shared this week with the participants. The IRS will only accept transcript requests from IVES participants who certify that they will submit requests only from clients who have been verified using the new requirements.
The IRS is taking this immediate step out of an abundance of caution to protect taxpayer information as well as safeguard the vital IVES program. IVES has been a successful program for the government and the private sector since 2006, and participants have a strong track record. While the IRS has concerns about limited areas in the program, these center on suspicious activity and customer validation issues. At issue is whether all IVES participants are always fully validating their clients, a situation we are currently investigating.
The new protections in the IVES program reflect other steps being taken elsewhere in the tax system to strengthen authentication and prevent fraud, such as the collaborative effort underway in the Security Summit between the IRS, the states and the tax industry. Earlier this month, the IRS also completed strengthening verification standards for Get Transcript, a separate service serving individuals.
The IRS is committed to working with IVES participants to balance protecting this sensitive information while minimizing burden on those using the transcript service. The stronger steps will help ensure the continuation of the IVES program in a safe, secure manner that protects taxpayers and combats potential fraud.
The IRS reminds taxpayers they can access their transcripts through the strengthened online Get Transcript application or by mail.