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1 EDELMAN BERLAND Experian Consumer Tax Survey Report January 2016

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Page 1: Experian Consumer Tax Survey

1

EDELMAN BERLAND

Experian Consumer Tax Survey Report

January 2016

Page 2: Experian Consumer Tax Survey

2 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

WHO HOW MANY

ACCURACY WHEN HOW

Adults Nationwide (Ages 18+)Who File Tax

Returns

n=1,000 Margin of Error = ± 3.1%

Data Collection Occurred

January 1-5, 2016

Online Survey

RESEARCH OBJECTIVE: To garner media-genic research around consumers’ understanding of tax-related identity

theft and identity protection during tax time

Research Methodology

Page 3: Experian Consumer Tax Survey

3 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

• Tax filing, document storage and refunds continue to be increasingly electronic.

• 79% report filing their most recent tax return online, up from 73% in 2011.• 18% scan and save their tax documents electronically, up from 6% in 2011.• More than three quarters of respondents have used EFT for tax refunds.

• Consumer familiarity with tax-related identity theft has risen significantly in recent years and tax-filers are increasingly concerned about being affected.

• 76% are familiar with tax-related identity theft, up from 57% in 2014.• 42% are concerned that someone could access their personal data through their tax

return, up from 35% in 2014.

• Awareness of the IRS-issued PIN continues to grow over time, but most are still unfamiliar with the newer protections available to victims of tax-related identity theft.

• Less than half of tax-filers are aware of the IRS-issued PIN (47%) or victims’ ability to request copies of fraudulent tax returns (30%).

• Still, there is consumer interest in using an IRS-issued PIN to protect their identity during tax season.

Key Findings

Page 4: Experian Consumer Tax Survey

Tax Filing & Refunds

Page 5: Experian Consumer Tax Survey

5 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

Most prepare their own taxes on their home network

56%

23%

10% 9%1%

49%

23%16%

11%2%

56%

19% 17%6%

1%

56%

18% 17%7% 2%

Tax Return Preparation 2011 2014 2015 2016

39% Online-based tax preparation program13% Tax preparation computer software 4% Without tax preparation software

76%

14%

7% 3%

Self-Preparation Network

(Shown off % prepare their own taxes)

Inside of my home on a secure networkAt work on a secure network

Q5: Who prepared your last tax return? Q6: Which of the following best describes how you prepare your documents prior to submitting your return? [Asked among respondents who prepare their tax returns themselves, n=556]

Page 6: Experian Consumer Tax Survey

6 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

Tax filing has become increasingly electronic over the past several years

File m

yself,

electr

onical

ly

Tax sp

eciali

st, ele

ctron

ically

File m

yself,

by mail

Tax sp

ecialis

t, by m

ail

Tax sp

eciali

st, do

n't kn

ow fili

ng meth

od

48%

25% 20% 5% 2%44% 35%

11%5% 5%

46% 35%10%

5% 4%

50%29%

13% 3% 5%

Tax Return Filing Method

2011201420152016

37% of those who

mail their taxes do not send

their returns by certified mail

Q7: How do you file your taxes?Q8: Do you send your tax returns by certified mail? [Asked among respondents who file their own taxes by mail, n=126]

TOTAL ELECTRONIC2011: 73%2014: 79%2015: 81%2016: 79%

2011-16

+6

Page 7: Experian Consumer Tax Survey

7 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

43% 48%

6% 3%

38%43%

12% 6%

1%

40% 39%

14% 5%

2%

35% 38%

18% 7%2%

Tax Document Storage

2011 2014 2015 2016

Q9: What do you do with physical copies of your old tax documents?Q11: Have you ever used Electronic Funds Transfer to receive a tax refund?

Americans are also increasingly utilizing electronic document storage and EFT as part of the digital trend

2014 2015 2016

22% 18% 16%

73% 78% 77%

Tax Refunds: Elec-tronic Funds Trans-

fer Usage

Yes No Unsure

-10

+12

2011-16: +4

2014-16:

Page 8: Experian Consumer Tax Survey

8 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

Q21: How much of a tax refund, if any, do you expect to receive this year? Please include both your federal and state taxes in your estimation.Q22: How do you plan to use your tax refund this year? [Asked of those who expect to receive a refund, n=797]

20%

15%

21%

26%

11%7%

Expected 2015 Tax Re-fund

None$1-$500$501-$1,000$1,001-$2,000$2,001-$3,000More than $3,000

This year, most consumers expect to receive a tax refund and plan to use it toward their personal savings or paying down credit card debt

Savings fund/investments

Pay off/down credit card debt

Pay off/down personal loan

Personal shopping spree

Pay off/down student loans

Automobile purchase

Home down payment

41%

35%

19%

18%

11%

11%

11%

Anticipated Tax Refund Usage(Shown off % expect a tax refund)

80% EXPECT A 2015 TAX REFUND(83% EXPECTED A 2014 TAX REFUND)

Page 9: Experian Consumer Tax Survey

Tax-Related Identity Theft

Page 10: Experian Consumer Tax Survey

10 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

Consumers are increasingly aware of tax-related identity theft and have growing concerns about being personally affected

Q13: Prior to this survey, were you familiar with the concept of tax-related identity theft?Q10: To what extent are you concerned that your tax preparer/service is susceptible to losing your information? [Asked among those whose taxes are prepared by someone else, 2014 n=510, 2015 n=435, 2016 n=439] Q12: Prior to this survey, to what extent were you concerned that someone could access your personal data, such as your Social Security number or banking information, through your tax return?

2014 2015 2016

22% 16% 11%

19% 19% 11%

57% 63% 76%

Yes, familiarHeard the termNo, not familiarUnsure

Familiarity with Tax-Related Identity

Theft 2014-16:

+19 FAMILIAR

2014 2015 2016

64% 53% 51%

21% 26% 25%

15% 21% 24%

ConcernedNeutralNot concerned

2014 2015 2016

37% 34% 32%

28% 28% 26%

35% 38% 42%

ConcernedNeutralNot concerned

Concern aboutTax Preparers

Losing Personal Data

(Shown off % use tax preparer)

Concern about Personal Data

Breach Through Tax Return

2014-16:

+7 CONCERNE

D

2014-16:

+9 CONCERNE

D

Page 11: Experian Consumer Tax Survey

11 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

Q19: To what extent do you agree or disagree with the following statement: I am concerned about becoming a victim of tax-related identity theft.Q14: Have you or anyone you know ever been a victim of tax-related identity theft?Q15: You mentioned that you were a victim of tax-related identity theft. Which of the following actions did you take after this incident? [Asked of tax-related identity theft victims, n=126] Q16: And, approximately how long did it take for you to receive your tax refund after you were informed that your identity had been stolen? [Asked of tax-related identity theft victims, n=126]

55%are concerned about becoming a victim of tax-related identity

theft

13% have been a victim of tax-related identity

theft

15% know a victim of tax-related identity theft

Filed a police report

Put fraud alert on credit reports

Filed a complaint with FTC

Ordered a credit report

Reported to IRS

Received IRS-issued PIN

59%

58%

38%

36%

30%

30%

Victims of tax-related identity theft most commonly file a police report and put a fraud alert on their credit reports

AVERAGE TIME TO RECEIVE TAX REFUND

AFTER INFORMED OF

IDENTITY THEFT:

6.75 MONTHS

Tax-Related Identity Theft Victims’ Actions Taken(Shown off % victim of tax-related

identity theft)

Page 12: Experian Consumer Tax Survey

12 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

There is limited awareness of new protections for victims of tax-related identity theft, even among those who have been personally affected

2014 2015 20167% 5% 8%

54% 50% 45%

39% 45% 47%

Yes NoUnsure

Awareness of IRS-Issued PIN

Q17: Prior to this survey, were you aware of the IRS-issued PIN?Q18. The IRS now allows victims of tax-related identity theft to obtain copies of the fraudulent tax returns that were filed by thieves using the victims’ stolen identification. Prior to this survey, were you aware that victims of tax-related identity theft could request copies of fraudulent tax returns from the IRS?

2014-16:

+8 AWARE

30%

61%

9%

YesNoUnsure

Awareness of Ability to Request Copies of

Fraudulent Tax Returns

60%Tax-Related

Identity Theft Victims

52%Tax-Related

Identity Theft Victims

Page 13: Experian Consumer Tax Survey

13 © Copyright 2016 Daniel J Edelman Inc. Intelligent Engagement

Q20: What is the one thing that you will do to try to prevent identity theft during tax season this year? [Asked of those familiar with tax-related identity theft, n=757]

Get an IRS Identity Protection PIN (IP PIN) Check my credit report

File my taxes as soon as possibleFile my taxes on a protected internet connection /

networkFile my taxes using a personal computer

File my taxes using certified mailPassword protect my electronic tax documents

File my taxes on a computer with up-to-date antivirus software

Enroll in credit monitoring / identity theft protectionKeep my physical tax documents in a locked, secure

location

17%12%12%

8%8%

7%7%

6%6%6%

Protections against Tax-Related Identity Theft(Shown off % familiar with tax-related identity theft)

However, consumers do have an appetite for using an IRS-issued PIN to protect their identities during tax season