What

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Whats New to Help Prevent Fraud In Kansas

• Kansas Department of Revenue
• Compliance Enforcement

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• New Legislation
• Kansas Department of Revenue Joins the
• Suspicious Filer Exchange Program
• New System Controls

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• The 2006 Kansas Legislature passed two
  important bills which will assist in the
  prevention of fraud in the State of Kansas
• House Bill 2772
• Intentional Misclassification of Employees
• Senate Bill 432, Sec. 7
• W2-1099s filed electronically if 51 or More
  Employees

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• House Bill 2772 Misclassification of workers
• Intentional Misclassification of Employee as
  Independent Contractor is now against the Law.
• Joint Program with Kansas Department of Labor and
  Kansas Department of Revenue
• Authority to share information when
  misclassification suspected.
• Effective July 1, 2006

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• House Bill 2772 Misclassification of workers
• Kansas Department of Labor will make
  Determination
• Employee vs Independent contractor.
• Penalties imposed did not change with the
  implementation of this law
• Work with Employers and Employees
• Work with Both Parties to investigate complaints
• Public Education to begin in the High growth
  communities where misclassification was reported
  prior to the law.

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• House Bill 2772 Misclassification of workers
• Compliance initiatives that will be taking place.
• A Joint Committee established between the Kansas
  Department of Revenue and the Kansas Department
  of Labor
• A Web-page developed that provides education,
  links to both Kansas Departments and a location
  for reporting misclassification
• www.kdor.org/misclass
• Collaboration, information sharing between Kansas
  Department of Revenue and Kansas Department of
  Labor through a share security database for
  investigation tracking and reporting.

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• Senate Bill 432, Sec. 7 Amended W2
  electronically
• Every employer, payer, person or organization
  files statements which report such withholding
  information for 51 or more employees or payees,
  the statements shall be filed by electronic
  means.
• Effective January 1, 2007 for the tax filing
  year of 2006.

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• Senate Bill 432, Sec. 7 Amended W2
  electronically
• Compliance initiatives that will be taking place.
• W2 matching program against filed returns
• This will allow the Department of Revenue to
  discover possible non-filers
• Identify misuse of social security numbers
• 1099 matching program against filed returns.
• Misclassification of workers

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• Suspicious Filer Exchange Program
• Kansas joined the suspicious filer exchange
  program this year.
• Faster Secured Communications between states on
  suspicious filers
• Updates on current fraud cases that are affecting
  most states
• Early notification of possible tax schemes
• 32 states participating currently in this program
• Additional information on this program can be
  located on the tax exchange webpage
  www.taxexchange.org

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• Suspicious Filer Exchange Program
• MSATA Participating States
• Illinois, Indiana, Iowa, Kansas, Missouri,
  Nebraska, Ohio, Oklahoma
• Other Participating States
• Alabama, Arkansas, California, Connecticut,
  Delaware, Georgia, Hawaii, Idaho, Kentucky,
  Louisiana, Maine, Maryland, Massachusetts,
  Minnesota, Montana, New Jersey, New York, North
  Carolina, Pennsylvania, Rhode Island, South
  Carolina, Utah, Vermont, Wisconsin

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• New System Controls
• Suspicious ABA and Bank account numbers
• Reference database in the up front process
  (business edits) for matching against electronic
  returns.
• Suspicious Tax Prepares
• Reference database in the upfront process for
  matching against all returns filed
• 3 or more refunds going to the same ABA and Bank
  account number.
• 5 or more refunds going to the same address.
• Tips Database logging and tracking all
  non-compliance tips received by the Kansas
  Department of Revenue.

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Thank you!Bev RiesFraud Investigation
ManagerCivil Tax EnforcementCompliance
EnforcementBev_Ries_at_kdor.state.ks.us
Kansas Department of Revenue