{"id":22057,"date":"2017-05-17T15:00:00","date_gmt":"2017-05-17T15:00:00","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/newsroom\/upfront-information-statement-matching\/"},"modified":"2023-03-01T13:53:36","modified_gmt":"2023-03-01T19:53:36","slug":"upfront-information-statement-matching","status":"publish","type":"newsroom","link":"https:\/\/www.hrblock.com\/tax-center\/newsroom\/irs\/audits-and-tax-notices\/upfront-information-statement-matching\/","title":{"rendered":"The new IRS \u201caudit\u201d: Upfront information-statement matching"},"content":{"rendered":"<p><img decoding=\"async\" style=\"width: 250px; height: 167px; margin: 5px; float: left;\" src=\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/164275358.jpg?x=1494968884207\" alt=\"\">In the past, the IRS didn\u2019t get around to auditing tax returns until several months after they were filed and after taxpayers received the refunds. But the 2017 tax season was a turning point. The IRS implemented the first phase of a move toward more upfront matching to improve return accuracy and increase its reach to more taxpayers. This new capability offers the IRS many opportunities in the future to expand its use of upfront matching as an audit alternative.<\/p>\n<p>This has practical implications for taxpayers. For example, in 2013, the IRS received about 148 million tax returns and more than 2.1 billion information statements (Forms W-2, Forms 1099, etc). When the IRS matched returns several months after they were filed, the IRS found more than 27 million returns that didn\u2019t match all the information statements. But because of limited resources, the IRS sent only about 4.1 million notices to these taxpayers proposing additional taxes. And taxpayers who aren\u2019t notified can continue to make the same errors every year.<\/p>\n<h2>Tax compliance is transforming<\/h2>\n<p>Until 2017, the IRS hasn\u2019t had many tools to scrutinize tax returns before issuing refunds.<\/p>\n<p>Tax software helps with many mathematical errors, and the IRS can compare taxpayers\u2019 names to their Social Security numbers to eliminate dependent errors.<\/p>\n<p>But before 2017, when it came to checking upfront on whether taxpayers correctly reported their wages and certain other income, the IRS couldn\u2019t match income information against tax returns before sending the refunds. Fraudsters took advantage of this situation to commit refund fraud.<\/p>\n<h2>New in 2017: The IRS scrutinized income reporting before sending refunds<\/h2>\n<p>Starting in the 2017 filing season, the IRS started upfront matching of filed tax returns against Forms W-2 and Form 1099. These information statements show the income that taxpayers receive during the year.<\/p>\n<p>Here\u2019s how the matching works:<\/p>\n<ul>\n<li>The IRS receives the tax return like usual.<\/li>\n<li>The IRS matches the return against Forms W-2 and\/or Forms 1099 that the IRS has received.<\/li>\n<li>If everything matches between the return and the information statements, the IRS releases the refund.<\/li>\n<li>If the IRS finds a mismatch, the IRS freezes the refund and sends a notice to the taxpayer asking for more information to prove his or her income and withholding.<\/li>\n<\/ul>\n<h2>Why, and how, did the IRS start upfront income matching?<\/h2>\n<p>In short: the PATH Act. The PATH Act helps the IRS fight stolen identity refund fraud and allows the IRS to do a \u201cquick audit\u201d of tax returns before sending refunds. The law requires earlier Form W-2 filing, which gave the IRS more time to match returns in the short time that is tax season.<\/p>\n<p>This change affected taxpayers who claimed the earned income tax credit (EIC) and\/or the additional child tax credit (ACTC). Those credits can amount to thousands of dollars in additional refunds. The IRS releases EIC\/ACTC refunds starting Feb. 15 at the earliest.<\/p>\n<h2>What can taxpayers do?<\/h2>\n<p>Taxpayers should take care to file an accurate tax return and report items from the information statements they receive. If taxpayers discover an error on the tax return, it\u2019s important to amend the return as soon as possible to avoid possible penalties.<\/p>\n<p>Taxes can be confusing, and some information statements report items that taxpayers don\u2019t need to add to their returns. The best bet: Consult an expert who completes many tax returns. This will help taxpayers avoid a refund hold and even an audit.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the past, the IRS didn\u2019t get around to auditing tax returns until several months after they were filed and after taxpayers received the refunds. But the 2017 tax season was a turning point. The IRS implemented the first phase of a move toward more upfront matching to improve return accuracy and increase its reach [&hellip;]<\/p>\n","protected":false},"author":554,"featured_media":24521,"menu_order":0,"template":"","tags":[],"news-categories":[23363,23364],"class_list":["post-22057","newsroom","type-newsroom","status-publish","has-post-thumbnail","hentry","news-categories-irs","news-categories-audits-and-tax-notices"],"acf":{"post_rest_thumbnail_alt_id":null},"yoast_head":"<title>Upfront information-statement matching | H&amp;R Block Newsroom<\/title>\n<meta name=\"description\" content=\"Learn how the IRS uses upfront matching to look at more tax returns earlier in the filing process and what this means for filing your taxes.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.hrblock.com\/tax-center\/newsroom\/irs\/upfront-information-statement-matching\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The new IRS \u201caudit\u201d: Upfront information-statement matching\" \/>\n<meta property=\"og:description\" content=\"Learn how the IRS uses upfront matching to look at more tax returns earlier in the filing process and what this means for filing your taxes.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.hrblock.com\/tax-center\/newsroom\/irs\/upfront-information-statement-matching\/\" \/>\n<meta property=\"og:site_name\" content=\"H&amp;R Block\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/hrblock\" \/>\n<meta property=\"article:modified_time\" content=\"2023-03-01T19:53:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/164275358-1080x675.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1080\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@hrblock\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/newsroom\\\/irs\\\/upfront-information-statement-matching\\\/\",\"url\":\"https:\\\/\\\/resource-center.hrblock.com\\\/newsroom\\\/irs\\\/upfront-information-statement-matching\\\/\",\"name\":\"Upfront information-statement matching | H&R Block Newsroom\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/newsroom\\\/irs\\\/upfront-information-statement-matching\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/newsroom\\\/irs\\\/upfront-information-statement-matching\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/resource-center.hrblock.com\\\/wp-content\\\/uploads\\\/2017\\\/08\\\/164275358.jpg\",\"datePublished\":\"2017-05-17T15:00:00+00:00\",\"dateModified\":\"2023-03-01T19:53:36+00:00\",\"description\":\"Learn how the IRS uses upfront matching to look at more tax returns earlier in the filing process and what this means for filing your taxes.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/newsroom\\\/irs\\\/upfront-information-statement-matching\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/resource-center.hrblock.com\\\/newsroom\\\/irs\\\/upfront-information-statement-matching\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/newsroom\\\/irs\\\/upfront-information-statement-matching\\\/#primaryimage\",\"url\":\"https:\\\/\\\/resource-center.hrblock.com\\\/wp-content\\\/uploads\\\/2017\\\/08\\\/164275358.jpg\",\"contentUrl\":\"https:\\\/\\\/resource-center.hrblock.com\\\/wp-content\\\/uploads\\\/2017\\\/08\\\/164275358.jpg\",\"width\":1600,\"height\":1067,\"caption\":\"Young Caucasian family having debt problems not able to pay out their loan. 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