Challenge questions are used primarily for user authentication and security purposes. They serve several key functions:
- Resetting Access Codes: Challenge questions are used when a user forgets their access code and needs to reset it. This is a critical security measure to ensure that only the authorized user can regain access to their account.
- Identity Verification: Challenge questions are part of the identity verification process. They help verify the user's identity when accessing systems such as the IRS's IDES system. This is particularly important for preventing unauthorized access and fraudulent activities.
- Multi-Factor Authentication: As part of the Secure Access (SA) account setup, challenge questions contribute to multi-factor authentication, which is a security measure to protect sensitive online tools from fraudulent access.
- Knowledge-Based Authentication: In some cases, challenge questions are used as knowledge-based authentication questions. These questions are designed to be answered only by the taxpayer and are based on information generally known only by the taxpayer. They are used to verify the taxpayer’s identity and help prevent fraudulent tax returns.
- Electronic Signatures: When electronically signing forms such as Form 8878 or 8879, challenge questions are used to verify the taxpayer’s identity. If the taxpayer fails to provide the correct answers after three attempts, they must provide a handwritten signature instead.
Overall, challenge questions are a vital component of the IRS's strategy to protect taxpayer data, prevent fraud, and ensure that only authorized users can access sensitive information and services.
Sources:
The Emerging Taxpayer Data Protection Problem
Publication 5118 (07/2021)
Publication 5190 (2/2022)
