National Fraud Summit Team Makes Recommendations on Naming Conventions for ACH Tax Refunds
Members of the financial industry, state revenue tax agencies, the National Automated Clearinghouse Association, and the Internal Revenue Service have banded together to combat identity theft and prevent fraud by making recommendations on naming conventions for ACH tax refunds.
The ACH common naming convention is the foundational step leading to the recovery of millions of dollars. Just one financial institution was able to identify $120,000 in rejected refunds to one and over $300,000 in rejected refunds to another state by implementing this simple step. These monies would not have been recovered by the states without the ACH common naming.
An example is NYSTTAXRFDJONES,STEVEN E & DEBO, xxxxx6789
For more information or to inquire about a contact for a participating state, please contact Melissa Smith by email or by phone at (217) 415-2617.
NEW ACH TAX REFUND NAMING FILE
The stakeholder group has identified a template for naming ACH state tax refunds. The Federal Bureau of Fiscal Services has already conformed. Your state wants to conform to these requirements and they need your help.WHAT’S THE IMPACT?
States without the ACH common naming convention are prevented from having questionable tax refunds identified as fraudulent, recovering the mistakenly issued funds amounting to millions across all states, and participating in other fraud prevention methods with financial institutions. Together we can work to make it more difficult for criminals to commit fraud while instilling confidence in customers that everything possible is being done to protect the integrity of tax revenue systems and our financial processes.The ACH common naming convention is the foundational step leading to the recovery of millions of dollars. Just one financial institution was able to identify $120,000 in rejected refunds to one and over $300,000 in rejected refunds to another state by implementing this simple step. These monies would not have been recovered by the states without the ACH common naming.
HOW CAN I HELP?
Get on board with your neighbor states and update your ACH file format to better identify an ACH transaction as a state or a city tax refund. The format consists of the four-digit State code (New York State would be NYST), the character string TAXRFD, Last Name, First Name, Middle Initial (if provided) and joint First Name, and Middle initial. Display the first 22 characters of name and the full Social Security Number or the last four digits of the Social Security number without the dashes.An example is NYSTTAXRFDJONES,STEVEN E & DEBO, xxxxx6789
THANK YOU TO THESE ALREADY FULLY CONVERTED STATES
Alabama, Arkansas, California, Colorado, Washington DC, Georgia, Minnesota, Mississippi, Missouri, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Oregon, South Carolina, Utah, Vermont, Virginia, West Virginia and Wisconsin.For more information or to inquire about a contact for a participating state, please contact Melissa Smith by email or by phone at (217) 415-2617.