State Highlights Tax Refund Quiz In Fight Against Fraud Spike

The state Department of Revenue is warning about a big increase in fraudulent tax returns as a result of identity theft, but the agency says its use of a confidential taxpayer quiz is helping to weed out scammers.

According to the Department of Agriculture, Trade and Consumer Protections, tax fraud complaints related to identity theft increased by 80 percent in Wisconsin last year. But Revenue Secretary Rick Chandler said they’re fighting back with the quiz tool, which aims to prove a person’s identity before a refund goes out. Questions are worded so that only the taxpayer would know the answers.

“What we’re doing at the Wisconsin Department of Revenue is to screen all the returns that come in and if we see anything that looks suspicious, we’ll give the taxpayer a taxpayer identification quiz,” Chandler said, “If it’s the real taxpayer, they’ll be able to answer the questions very quickly and we’ll release the refund.”

While Chandler acknowledged that the system means some returns take longer to practice, the agency estimates nearly $140 million in fraudulent refunds have been blocked since they began using the system three years ago.