Well as a tax preparer I know that for years a tax was rejected from E-Filing if the date of death of a spouse stated on the income tax was wrong, so I knew that the IRS was checking the death index for the death of a spouse, but as far as I could tell a death of a child was not being checked.
In 2010 the IRS started using a new computer system to handle income taxes, the old system was so old that they had to hire retired programmers each year to do updates on that old system, new programmers do not get taught the programming language those computers used. The new system was to be much faster, they told us preparers that they would eventually be able to get refunds back to the taxpayers in three days, but what I liked was the turn around time for returns I had sent in electronically dropped from one day to less than an hour. That first year they only processed about half of the returns filed electronically, and most of them were the simpler forms, but in 2011 all the returns went through the new system, and the turn around time for us was slower than the previous year, but still a lot faster than using the old computer and refunds were a little slower that year.
One seminar I went to this year taught by an IRS agent he said that the IRS now has more than 1000 agents just working on identity theft, and that number seems to be growing even though the IRS has been reducing total staff due to budget cuts from Congress.
Each tax season we get a list of reject codes from our software, and this year is no different, but the list this year has a few new codes for us, and guess what number one on our list of new codes is?
Situation: The return is rejected due to one of the SSNs used in that return being “systemically locked”
Examples shown below; this is not the full list
IND-941 IRS reject -- The Spouse SSN in the Return Header has been locked because Social Security Administration records indicate the number belongs to a deceased individual.
Being locked means that social security number can not be used on an electronically filed tax return ever again, and I will bet a paper return using that number will get special attention from one of those 1000+ IRS agents that are working on identity theft. I just hope it does not slow down an income tax from a surviving spouse that is filing a return after the death of the other spouse.
So the IRS is working on stopping identity theft and lets hope they can stop it without further hindering genealogists from using the SSDI.