Method And System For Combatting Tax Identity Fraud

Abstract

Disclosed is a method for combatting tax refund fraud, which functions in combination with a taxpayer's social security number (SSN) and a random, electronically-generated Anti-Fraud Identity Authentication Number (AFIN). The AFIN is generated, assigned, and mailed annually to each citizen. The AFIN may be utilized by federal, state, and foreign income tax agencies, and with either paper or e-filed tax returns. The AFIN is included in an electronic process of combining with the taxpayer's SSN, to produce an “AFIN/SSN,” which information is then stored in a secure master database. The tax agency scans each return upon receipt comparing the submitted AFIN/SSN to the AFIN/SSN database. If the scanned AFIN/SSN on the return matches the AFIN/SSN database, the system automatically allows the tax filing transaction to proceed to completion. If there is a mismatch with the AFIN/SSN database, the return is earmarked and becomes subject to further tax agency scrutiny.

Claims

1. In circumstances where a government entity maintains (a) at least one social program providing benefits relative to the welfare of its citizens through subsidies and/or assistance measures such as access to resources for food, housing, health care and well-being, including potentially vulnerable citizens such as children, the elderly, the unemployed, and where said citizens are assigned individual identification numbers (IIN), said INN being inclusive of personal information to thereby establish a citizen's identity and entitlement to said at least one social program, and (b) a tax agency or taxing authority, disclosed is a method for substantial elimination of the possibility of Identity Tax Refund Fraud (ITRF) relative to the tax agency of said government entity, the method comprising the steps of: generating from a first software program, a plurality of random alpha-numeric identification numbers, said numbers designated as an “Anti-Fraud Identity Authentication Number” (AFIN); obtaining, from an appropriate database, the individual identification number (IIN) and certain personal information of each of said citizens who are or may be beneficiaries of said at least one social action program; combining, by a use of a second software program, a separate one of said AFIN's with the IIN of each of said citizens, thereby formulating a distinct designation entitled an “AFIN-IIN;” compiling collectively, the totality of said AFIN-IIN's Into a Master AFIN-INN electronic database; assigning and mailing, by domestic postal service, an individually distinctive AFIN to each of said citizens; requiring that all citizens who submit tax returns to a tax agency or bureau of said government include their assigned AFIN with their tax return; upon receipt by the fax agency of said tax returns from each one of said taxpayers, the tax agency scanning those of said tax returns received which have an AFIN included with said tax return; said tax agency comparing whether each received tax return having as AFIN matches and corresponds to the AFIN-IIN stored within said Master AFIN-INN electronic database; the tax agency continuing to process each of said tax returns received having matching AFIN-IIN information; or the tax agency transferring those of the received tax returns having conflicting AFIN-IIN information for further scrutiny by the appropriate governmental department.

2. The method of claim 1 wherein the at least one social action program is at least one program maintained by the United States Social Security Administration, and wherein the tax agency is the United States Internal Revenue Service.

3. The method of claim 1, wherein the at least one social action program is that of the government of an individual American state selected from the group consisting of the fifty states of the United States of America, and wherein the tax agency is that operated by an American state, said state selected, in a co-related manner, from the group consisting of the fifty states of the United States of America.

4. The method of claim 1, wherein the citizen is a duly authorized and recognized business entity under the jurisdiction of said government.

5. The method of claim 1, wherein said Master AFIN-INN electronic database utilizes an internal, air-gapped secure data base, not connected to the world-wide web.

6. A method for substantial elimination of the possibility of Identity Tax Refund Fraud (ITRF), with respect to the Internal Revenue Service (IRS) of the United States, the method comprising the steps of: generating, from a first software program, a plurality of random alpha-numeric identification numbers, each of said numbers designated as an “Anti-Fraud Identity Authentication Number” (AFIN): obtaining, from an appropriate database, the individual social security numbers (SSN) and certain personal information of each of said living citizens who are or may be beneficiaries of any United States Social Security Administration program; combining, by a use of a second software program, a separate one of said AFIN's with the SSN of each of said citizens, thereby formulating a distinct designation entitled an “AFIN-SSN;” compiling collectively, the totality of said AFIN-SSN's into a Master AFIN-SSN electronic database: assigning an individually distinctive AFIN to each of a plurality of prospective taxpayers; mailing, via the United States Postal Service, all individually distinctive AFIN to each prospective taxpayer; requiring that all persons who submit tax returns to the IRS include their AFIN with the return; upon receipt by the IRS of each tax return, scanning those of said tax returns received which have an AFIN included with said tax return; the IRS determining, by a scanning comparison, whether each received tax return listing an AFIN matches and corresponds with the AFIN-SSN stored within the Master AFIN-SSN electronic database; the IRS continuing to process each of said tax returns received having matching AFIN-SSN information; the IRS transferring those of the received tax returns having conflicting AFIN-SSN information for further scrutiny by the appropriate government department; and the IRS re-assigning different AFIN to prospective taxpayers on an annual basis.

7. The method of claim 6, wherein the Internal Revenue Service is replaced by, and thereby comprises, a similar tax revenue bureau or agency of any single American state, said state selected from the group consisting of the fifty states of the United States of America.

8. The method of claim 6, wherein (a) the prospective taxpayer is a duly authorized and recognized business entity, (b) the SSN is replaced by the Employer Identification Number (EIN) of said business entity, and (c) there is complied a Master AFIN-EIN electronic database.

9. The method of claim 6, wherein said Master AFIN-SNN electronic database utilizes an internal, air-gapped secure data base, not connected to the world-wide web.

10. A method for reducing complexity by means of eliminating any requirement for a taxpayer to go online via the internet for acquiring a tax-related Personal Identification Number (PIN), the method comprising, the steps of: generating, from a first software program, a plurality of random alpha-numeric identification numbers, each of said numbers designated as an “Anti-Fraud Identity Authentication Number” (AFIN); obtaining, from an appropriate database, the individual social security numbers (SSN) and certain personal information of each of said living citizens who are or may be beneficiaries of any United States Social Security Administration program; combining, by a use of a second software program, a separate one of said AFIN's with the SSN of each of said citizens, thereby formulating a distinct designation entitled an “AFIN-SSN;” compiling collectively, the totality of said AFIN-SSN's into a Master AFIN-SSN electronic database; assigning an individually distinctive AFIN to each prospective United States taxpayer; mailing, via the United States Postal Service, an individually distinctive AFIN to each prospective taxpayer; and requiring that all persons who submit tax returns to the IRS include their AFIN with the return.

11. A method for freeing tens of thousands of United States Federal and State tax agency and law enforcement employees who currently have duties involving combatting Identity Tax Refund Fraud (ITRF) so that these human resources can be employed more effectively elsewhere, the method comprising the steps of: generating, from a first software program, a plurality of random alpha-numeric identification numbers, each of said numbers designated as an “Anti-Fraud Identity Authentication Number” (AFIN); obtaining, from an appropriate database, the individual social security numbers (SSN) and certain personal information of each of said living citizens who are or may be beneficiaries of any United States Social Security Administration program; combining, by a use of a second software program, a separate one of said AFIN's with the SSN of each of said citizens, thereby formulating a distinct designation entitled an “AFIN-SSN;” compiling collectively, the totality of said AFIN-SSN into a Master AFIN-SSN electronic database; assigning an individually distinctive AFIN to each of prospective taxpayers; mailing, via the United States Postal Service, an individually distinctive AFIN to each prospective taxpayer; requiring that all persons who submit tax returns to the IRS include their AFIN with the return; upon receipt by the IRS of each tax return, scanning those of said tax returns received which have an AFIN included with said tax return; the IRS determining, by a scanning comparison, whether each received tax return listing an AFIN matches and corresponds with the AFIN-SSN stored within the Master AFIN_SSN electronic database; the IRS continuing to process each of said tax returns received having matching AFIN-SSN information; the IRS transferring those of the received tax returns having conflicting AFIN-SSN information for further scrutiny by the appropriate government department; and the IRS re-assigning different AFIN to prospective taxpayers on an annual basis.

12. An improved method for combating Identity Tax Refund Fraud (ITRF) with respect to the U.S. Internal Revenue Service, the improvement comprising: generating, from a first software program, a plurality of random alpha-numeric identification numbers, each of said numbers designated as an “Anti-Fraud Identity Authentication Number” (AFIN); obtaining, from an appropriate database, the individual social security numbers (SSN) and certain personal information of each of said living citizens who are or may be beneficiaries of any United States Social Security Administration program; combining, by a use of a second software program, a separate one of said AFIN's with the SSN of each of said citizens, thereby formulating a distinct designation entitled an “AFIN-SSN;” compiling, collectively, the totality of said AFIN-SSN's into a Master AFIN-SSN electronic database; assigning an individually distinctive AFIN to each of prospective taxpayers; mailing, via the United States Postal Service, an individually distinctive AFIN to each prospective taxpayer; requiring that all persons who submit tax returns to the IRS include their AFIN with the return; upon receipt by the IRS of each tax return, scanning those of said tax returns received which have an AFIN included with said tax return; the IRS determining, by a scanning comparison, whether each received tax return listing an AFIN matches and corresponds with the AFIN-SSN stored within the Master AFIN-SSN electronic database; the IRS continuing to process each of said tax returns received having matching AFIN-SSN information; the IRS transferring those of the received tax returns having conflicting AFIN-SSN information for further scrutiny by the appropriate government department; and the IRS re-assigning a different AFIN to prospective taxpayers on an annual basis.

13. The improved method of claim 12, wherein said Internal Revenue Service is replaced by, and thereby comprises, a similar tax revenue bureau or agency of any single American state, said state selected from the group consisting of the fifty states of the United States of America.

14. The method of claim 12, wherein (a) the prospective taxpayer is a duly authorized and recognized business entity subject to filing a business tax return; (b) the SSN is replaced by, the said business entity Employer Identification Number (EIN) of said business entity, and (c) there is compiled a Master AFIN-EIN electronic database.

15. The method of claim 12, wherein said Master AFIN-SSN electronic database utilizes an internal, air-gapped secure data base, not connected to the world-wide web.

16. The method of any one of claims 6, 10, 11, or 12, wherein the prospective taxpayer confirms, by U.S. Postal System mail, the receipt of his/her assigned AFIN.

Description

BRIEF DESCRIPTION OF THE VIEWS OF THE DRAWINGS

[0068] FIG. 1 is a block flow diagram of method step 100, showing the major elements of the currently available, state of the art that is envisioned for the disclosed method, including showing the generation 101 of the Anti-Fraud Identity Authentication Number (AFIN) 102 with taxpayer personal information 103 to ultimately populate the master AFIN/SSN database 105.

[0069] FIG. 2 is a flow chart of method step 200 illustrating the generation, from the master AFIN/SSN database 105, a printed AFIN notice 202 which is sent to the taxpayer, who incorporates his/her AFIN 102 in their income tax forms 204 before sending them to the tax agency 205.

[0070] FIG. 3 is a block diagram of method step 300, further illustrating the procedural flow of the AFIN notice 203 sent to the taxpayer, and describing in general terms 301 its coordinated use with the taxpayer's income tax forms 204 prior to being sent to the tax agency 205.

[0071] FIG. 4 is a flow chart of method step 400 demonstrating an example of the prospective wording 401 of the mailing 203 of the AFIN notice 202 (not shown) as proposed by the present inventive concept.

[0072] FIG. 5 is a block schematic diagram of method step 500, showing the procedure by which a tax agency 205 would sequentially arrive at decisions supported by its authentication procedures comparing submitted income tax forms with the AFIN/SSN database 105.

[0073] FIG. 6 illustrates a partially-completed U.S. income tax form 600 showing only the inclusion of the taxpayers' names 601, address 602, Social Security Numbers 603 and AFINs 604, in accordance with the inventive concept.

DETAILED DESCRIPTION OF THE INVENTIVE CONCEPT

[0074] The objects, features, and advantages of the inventive concept presented in this application are more readily understood when referring to the accompanying drawings. The drawings, totaling six figures, show the basic components and functions of embodiments and/or methods of use. In the several figures, like reference numbers are used in each figure to correspond to the same component as may be depicted in other figures.

[0075] The inventive concept presented is designed as series of interconnected processes, or modules, comprising a total process. The steps of the several interconnected processes render the disclosed method workable in today's environment of ITRF. The discussion of the present inventive concept will be initiated with FIG. 1, which illustrates a functional diagram of method process 100 of the disclosed method and system. Illustrated are four basic modules: the Alpha/Numeric Number Generator 101; the resultant Anti-Fraud Identity Authentication Number (AFIN) 102; the Taxpayer Information 103 to include their Social Security Number (SSN); the AFIN/SSN combining process 104; and the AFIN/SSN Database 105. All of process 100 hardware, software, procedures, data process flow elements, etc. is known to those skilled in the present state of the art.

[0076] Each of the basic modules of process 100 interact to produce the AFIN/SSN database 105, which stores the taxpayer's AFIN/SSN Combiner 104 and other profile information such as date of birth, address, dependents and the like. The primary users of the method and system disclosed are the governmental taxing agency and the taxpayer.

[0077] Viewing FIG. 1 and referring to process 100 of the claimed inventive process, the Alpha/Numeric Number Generator 101 can be any generally recognized software program that has the capability to produce the Anti-Fraud Identity Authentication Number (AFIN) 102. Such software products can be part of database management systems offered by such generally recognized companies as, but not limited to, Computer Associates®, IBM®, Oracle®, Microsoft®, Sybase®, Teradata®0, i.e. known to those skilled in the present state of the art.

[0078] As shown in FIG. 1, the AFIN 102 of the present inventive concept can be an alpha-numeric or straight numeric number of any length, for example, twelve (12) digits and can be used by federal or state tax agencies. This is three digits more than a SSN and four less than most credit card numbers—none of which pose any problems for people to copy. If the alpha-numeric formulation is chosen, letters like “I”, “O”, “Q,” “U,” and “Z” should be disqualified from use to avoid confusion (during taxpayer printing on paper or electronic tax forms) with “one”, “zero”, “zero” “V,” or “2” respectively. In addition, the remaining twenty-one alphabet letters can be used in a twenty-one (21) year, revolving cycle before being used again. Not counting a letter prefix, with eleven numerical digits, mathematically there would be almost one hundred billion random federal AFIN 102 possibilities for each year.

[0079] For use by state tax agencies, the prefix letters can be each individual state's two letter state abbreviation such as AL for Alabama; CA for California; GA for Georgia; PA for Pennsylvania; TX for Texas and the like; followed by ten numerical digits would give almost ten billion random state AFIN possibilities. Likewise, if the disclosed method is used by foreign countries, the prefix letters may be the country's international two-letter code defined by the International Organization for Standardization (IOS).

[0080] The AFIN 102 is combined with taxpayer profile information, i.e. name, address, Social Security Number, etc. from existing databases 103. The AFIN/SSN Combiner 104 joins the AFIN 102 and SSN, along with other personal information, to produce the AFIN/SSN database 105. Typically, this operation would be performed within the realm of dedicated databases and database manager systems using Structured Query Language (SQL) which is available in successfully recognized products offered by companies such as Computer Associates®, IBM®, Oracle®, Microsoft®, Sybase®, Teradata®. Optimally, all these various resulting databases may be contained in one dedicated tax agency database server, i.e. one that is not accessible to the outside world.

[0081] In reference to FIG. 2, the Process 200 of the present inventive concept compromises common AFIN/SSN Database 105; printer 201; AFIN Notice 202; AFIN 203 mailed taxpayer; Taxpayer Income Tax Form 204; and Tax Agency 205.

[0082] Referring to process 200 in FIG. 2 of the inventive concept, the AFIN/SSN database 105 is the feed for printers 201 to be utilized by the IRS in performance of the inventive concept. By means of coded instructions, the printers select the AFIN 102 and the taxpayer's name and address for coordinated printing. Printers with this capability and generally well known throughout the various U.S. federal governmental agencies.

[0083] The printers 201 receive computer-generated instructions to select the appropriate AFIN 102 and the corresponding taxpayer's name and address for printing. The AFIN notice 202 is then mailed 203 to each taxpayer. The Notice 202 can be as simple as a folded post card, with perforated seals on three edges which allow for easy opening similar, to other mailers commonly sent out by the Social Security Administration. Mailing the AFIN 102 number will protect the AFIN 102 from electronic intercept or by theft of information, particularly where similar such information is presently stored online.

[0084] Continuing with process 200, a taxpayer uses the AFIN 102 along with other pertinent information on his or her income tax forms 204 and sends the returns either as paper or electronic copies to the appropriate federal or state tax agency 205.

[0085] Referring to FIG. 3, the flow diagram of process 300, one embodiment of the present inventive concept illustrates the proposed standard of mailing 203 the AFIN mailed to a taxpayer. Shown in step 301 is a sample of clearly worded, simple AFIN instructional language. Step 204 schematically illustrates a grouping of taxpayer's income tax forms 204 which will be transmitted to the appropriate tax agency 205.

[0086] In FIG. 4, process 400 again illustrates the standard mailing 203 of the AFIN 102 (not shown) to a taxpayer. Also shown in FIG. 4 is a sample of an announcement 401 with informative language 401 which directs the taxpayer to the specific alpha-numerical sequence forming his/her AFIN 102. The taxpayer, assuming he/she is required to file an income tax return, then proceeds to submit the completed income tax forms to the appropriate tax agency 205.

[0087] More particularly, process 400 as detailed in FIG. 4 shows the AFIN Notice 203 mailed to the Taxpayer showing an example of specific AFIN instructional language 401 regarding the use of their AFIN in conjunction with their SSN on their Income Tax forms 204 which are sent to the necessary federal or state tax agency 205. The specific language in the example announcement states that the AFIN is to be used in conjunction with the taxpayer's SSN; that all individuals have been issued an AFIN even if they are not required to file income taxes; and that if the AFIN is not used to file income taxes, they are required to destroy it so that it is not used by unauthorized individuals.

[0088] Referring to FIG. 5, the flow diagram Process 500 of the present inventive concept illustrates a typical tax agency 205, having received a taxpayer's income tax forms 204, and transmitting each individual tax form 204 to a computerized authentication process 501, in conjunction with information from the master AFIN/SSN database 105. As an example, the authentication process 501 may culminate in a “Yes” result, which is authentication to proceed with tax payment or refund payment 502. On the other hand, for a different submitted tax form 204, the authentication process 501 could render a showing of “No” or a rejection of the particular income tax form 204, indicating that further tax agency scrutiny 503 is required. Again, all hardware, software, procedures, data process flow, etc. is known to those skilled in the present state of the art.

[0089] With regard to process step 500, shown in FIG. 5, the tax agency 205 is in receipt of the taxpayer Income Tax Form 204. The taxpayer income tax form 204 is compared with the AFIN/SSN Database 105 by the authentication process 501 to verify that the return, taxpayer AFIN, SSN and all relevant information is correct and authentic. Currently, approximately ninety-one percent (±91.0%) of federal income tax forms 204 e-filed are submitted in an electronic file, which makes for a convenient comparison with the proposed AFIN/SSN Database 105.

[0090] The remaining ±9 percent of filed federal income tax forms are paper filed and must first be converted into electronic files to be compared with the AFIN/SSN Database 105. This can be done with large volume scanning/optical character recognition (OCR) equipment and software such as that offered by such generally recognized companies as, but not limited to, ABBYY USA®, C Vision Technology®, Cannon®, Fujitsu Computer Products®, Scan Corporation®, Prevalent Software® and the like.

[0091] In one embodiment, if the return is valid and the Process Transaction 502 shows a “YES” authentication, the income tax form 204 can proceed forward for either tax payment to the tax agency 205 or refund payment to the taxpayer. Alternatively, in another embodiment, if the Process Transaction 503 shows a “NO” authentication, the Income Tax Form 204 is subjected to further scrutiny by the Tax Agency 205.

[0092] FIG. 6 illustrates an example of a partial 1040 income tax form 600 (referenced as “income tax form 204” in the preceding figures above). The hypothetical form 600 shows the location and inclusion of a fictional taxpayer's and spouse's names 601, address 602, SSNs 603(a), 603(b), and AFINs 604(a), 604(b) according to the present inventive concept.

[0093] While preferred embodiments of the present inventive concept have been shown and disclosed herein, it will be obvious to those persons skilled in the art that such embodiments are presented by way of example only, and not as a limitation to the scope of the inventive concept. Numerous variations, changes, and substitutions may occur or be suggested to those skilled in the art without departing from the intent, scope, and totality of this inventive concept. Such variations, changes, and substitutions may involve other features which are already known per se and which may be used instead of, in combination with, or in addition to features already disclosed herein. Accordingly, it is intended that this inventive concept be inclusive of such variations, changes, and substitutions, and only limited by the scope of the claims presented herein.