The IRS has expanded its testing of the Forms W-2 authentication code for this tax season to combat return identity theft and refund fraud. The IRS collaborated with certain payroll service providers to include a 16-digit code and a new verification code field on approximately 50 million W-2 copies provided to employees.
Tax professionals are urged to look for the verification code field because its location on the form will vary. The code will be displayed in four groups of four alphanumeric characters, separated by hyphens: XXXX-XXXX-XXXX-XXXX. Some W-2s will have an empty verification code box where no action is required. Instructions indicate: “If this field is populated, enter this code when it is requested by your tax return preparer software. It is possible your software or preparer will not request the code. The code is not entered on paper-filed returns.