The IRS, along with certain payroll services, will be testing a 16 character W-2 Verification Code for the 2015 filing season the IRS announced on their website at https://www.irs.gov/Individuals/IRS-Tests-W-2-Verification-Code.
An important fact to note is that the IRS initially will not be doing anything with this code except to “test-and-learn” to see if it is useful in determining the integrity of W-2 information. Thus, to put it a bit differently, using or not using the code is not going to do anything for the moment to improve the chances that a taxpayer will not be subject to ID theft.
The Code will also not be forwarded to the Social Security Administration, nor given to state and local tax departments.
Not all W-2s received from the participating payroll services will have this code and if it is missing the IRS indicates that no inquiry needs to be made of the payroll service.
The code will appear on W-2 copies B and C in a separate labeled box. The form will include these instructions:
Verification Code. If this field is populated, enter this code when it is requested by your tax return preparation software. It is possible your software or preparer will not request the code. The code is not entered on paper-filed returns.
The code will be four groups of alphanumeric characters, separated by hyphens. The IRS gives the following example: XXXX-XXXX-XXXX-XXXX.