IRS: Request an IP PIN to Protect Against Identity Theft

In 2023, consumers across the United States lost a total of more than $10 billion to fraud, according to the Federal Trade Commission. More than a million of them were victims of identity theft, with reports of these and other types of scams up from the previous year.

With identity theft and taxpayer fraud on the rise, the Internal Revenue Service (IRS) is encouraging taxpayers to take extra caution when filing tax returns. One simple way to help safeguard your identity is to create an identity protection personal identification number (IP PIN) through the IRS. An IP PIN is a six-digit number that helps the IRS verify your identity when you are filing your tax return.

Background and Purpose of the Identity Protection PIN Program

What is the IP PIN Program?

The IRS introduced the Identity Protection PIN (IP PIN) program to combat the growing issue of tax-related identity theft. Fraudsters use stolen Social Security numbers (SSNs) and personal information to file false tax returns and claim fraudulent refunds. This form of identity theft poses a serious challenge for the IRS, causing financial losses and delays for victims who must resolve the issue with the agency.

Who Was the IP PIN Program Initially For?

Initially, the IP PIN program was designed for higher-risk taxpayers. This group included high-net-worth individuals and taxpayers who had previously reported identity theft to the IRS. The goal was to provide extra protection to those most vulnerable to tax-related fraud.

Expansion to All Taxpayers

As tax-related identity theft increased, the IRS expanded the program. Now, all taxpayers can voluntarily request an IP PIN. This change empowers everyone to take proactive steps in protecting their tax filings from unauthorized use and fraud.

Using and Getting Your IRS Identity Protection PIN

How the IP PIN Program Works

• Taxpayers who enroll in the program must use their IP PIN when filing their federal tax return. This applies whether you file electronically or on paper.
• The IP PIN helps verify your identity, ensuring that only authorized individuals can submit a tax return using your Social Security Number (SSN).
• If your IP PIN is missing or incorrect, the IRS will reject your filing. This helps prevent unauthorized or fraudulent tax returns.

How to Get Your IP PIN

• You can receive an IP PIN through the IRS website by verifying your identity using the “Get an IP PIN” online tool.
• Once enrolled, the IRS issues a new IP PIN every year to maintain your account security.
• If you lose your IP PIN, you can retrieve it anytime. Instructions for this are available on the IRS website.

Why Security in Tax Filing Is Important

Paying taxes is not only mandatory but also helps to keep the government running. However, doing so can expose individuals to potential risks, especially when done electronically. Tax-related identity theft can cause significant financial and personal stress, delay tax refunds, and require time and effort to resolve. With more people filing online, the IRS emphasizes the need for enhanced security to ensure taxpayer data remain safe.

Steps to Improve Tax-Paying Security

In addition to the IRS’s IP PIN program, you can also take additional precautions. Here are some recommendations:

• Use Trusted Software or Hire a Reputable Tax Preparer: When filing taxes, use reputable tax software with strong security features or a licensed tax professional who follows IRS security guidelines.
• Avoid Phishing Scams: Be suspicious of emails or calls from anyone claiming to be from the IRS. The IRS never initiates contact via email or phone. Always use official IRS channels to verify any communications.
• Enable Two-Factor Authentication: Many tax software providers offer two-factor authentication to add an extra layer of security to online accounts.
• Regularly Monitor Financial Accounts: Regularly monitoring your bank accounts, credit cards, and credit report can help you catch unauthorized activity.
• Safeguard Personal Documents: Keep paper records of tax documents secure and shred any sensitive documents you no longer need.

Staying Secure When Filing Taxes

By providing taxpayers with an extra layer of security, the IRS’s IP PIN program helps prevent unauthorized access to sensitive information. Working with a trusted tax professional can help reduce the risk of fraud and identity theft.

With an experienced estate planning attorney, you can pursue strategies to reduce the amount of taxable assets you have and help you plan for your future.