WASHINGTON – Federal taxpayers that receive Form W-2 in early 2017 may notice a new entry – a 16-digit verification code, part of an effort conducted by the Internal Revenue Service to protect taxpayers and strengthen anti-fraud efforts. The expanded use of the W-2 Verification Code is a way to validate the wage and tax withholding information. For taxpayers, taking a moment to add this code when filling out taxes helps the IRS authenticate the information. This in turn helps protect against identity theft and unnecessary refund delays.
For 2017, the IRS and its partners in the payroll service provider industry will place the code on 50 million Forms W-2. This is up from two million forms in 2016.
The IRS, state tax agencies and the nation’s tax industry – partners in combating identity theft – ask for help in their efforts. If your W-2 contains the code, please enter it when prompted if using software to prepare your return. Or, make sure your tax preparer enters it.
If the code is not included, your tax return will still be accepted. However, initial results indicate the verification code shows promise in reducing tax fraud. It helps IRS processing systems authenticate the real taxpayer. Identity thieves sometimes file false Forms W-2 to support their fraudulent tax returns.
This initiative will affect only those Forms W-2 prepared by payroll service providers. The verification code’s location on the form will vary. Enter the code on electronically filed returns only. Most software providers will prompt you to enter the code.