Identity Protection PIN Worth Consideration
As I've written about frequently, tax-related identity theft is rampant. If it was a disease, certainly it would no doubt be considered a pandemic. I personally have clients right now that are having to deal with this problem, and take it from me, it's not just an annoyance, it's a life disruption event that you want to avoid if at all possible.
That's why, like many tax professionals, I strongly recommend that you consider obtaining an IRS Identity Protection PIN (IP PIN) to protect against tax-related identity theft. The IP PIN can be a critical defense against identity thieves.
Weighing in on the subject, IRS Commissioner Chuck Rettig said, "These identity protection numbers provide an extra layer of safety to protect people against tax-related fraud tied to using stolen personal information. Following work by the IRS, the IP PIN program is now available to anyone who can verify their identity."
The Electronic Tax Administration Advisory Committee, or ETAAC, last month highlighted the importance of the IP PIN to taxpayers and tax professionals alike. "The IP PIN is the number one security tool currently available to taxpayers from the IRS," the independent advisory group said in its annual report to Congress. "This tool is the key to making it more difficult for criminals to file false tax returns in the name of the taxpayer. In our view, the benefits of increased IP PIN use are many."
The way an IP PIN protects you is that once issued, it is required to be shown on your tax return for the year to which it applies. If a return is filed using your identity information either without an IP PIN, or showing one that is incorrect, the IRS will assume the return is filed fraudulently and not accept or process it.
Securing an IP PIN takes a bit of your time, but is well worth the effort, in my opinion. Also, it is something you will have to do for yourself, again for your own protection. While with the proper authorizations, tax professionals like myself can do many things on behalf of taxpayers, this isn't one of them. For security reasons, we cannot obtain an IP PIN on behalf of clients, instead, taxpayers must obtain their own IP PIN.
Once received, it's important that you should share your IP PIN only with a trusted tax preparation professional if you use one. Keep in mind that the IRS will never call, email, or text to request the IP PIN, so if you receive such a request, just hang up or hit DELETE!
Here are a few things to know about the IP PIN:
- It's a six-digit number known only to the taxpayer and the IRS.
- The program is voluntary for taxpayers who have not yet been victims of identity theft.
- The IP PIN should be entered onto the electronic tax return when prompted by the software product or onto a paper return next to the signature line.
- The IP PIN is valid for one calendar year; taxpayers must obtain a new IP PIN each year.
- Only taxpayers who can verify their identities may obtain an IP PIN.
To obtain an IP PIN, the best option is the "Get an IP PIN" IRS online tool. You will have to validate your identity through Secure Access authentication to access the tool and your IP PIN. The process is somewhat rigorous, so before attempting, see "Secure Access: How to Register for Certain Online Self-Help Tools" at IRS.gov.
If you are unable to validate your identity online and if our income is below $73,000 (below $146,000 for married couples), you can file "Form 15227, Application for an Identity Protection Personal Identification Number" The IRS will then call the telephone number provided on Form 15227 to validate your identity. However, for security reasons, the IRS will assign an IP PIN for the next filing season. The IP PIN cannot be used for the current filing season.
If you cannot validate your identity online or on the phone with an IRS employee after submitting a Form 15227 (or if you are ineligible to file a Form 15227), you can call the IRS to make an appointment at a Taxpayer Assistance Center. You will need to take one picture identification document and another identification document to prove your identity. Once verified, the IP PIN will be sent via U.S. Postal Service within three weeks.
Note that the IP PIN process for confirmed victims of identity theft remains unchanged. These victims will automatically receive an IP PIN each year.
Finally, when I give professional advice, I'm often asked something like "what would you do if it was you?” That's simple here – I would absolutely go to the trouble of getting an IP PIN from the IRS. In fact, I already have!
