As we step into the new tax season, the issue of identity theft and fraud looms large over taxpayers. In fact, estimates show that tax-related identity theft resulted in a staggering loss of $14.5 billion in 2020 alone . To combat this alarming trend, the IRS now offers all taxpayers the chance to apply for an Identity Protection PIN (IP PIN).
What is an IRS Identity Protection PIN (IP PIN)?
The IRS Identity Protection PIN is a unique 6-digit code that serves as a personal identifier known only to you and the IRS. It acts as a secondary layer of authentication during the tax filing process, adding a measure of security against identity thieves attempting to file fraudulent returns in your name.
In essence, an IP PIN “locks” your tax account, with the PIN being the key that opens it for legitimate filings. If your electronic return does not include the correct IP PIN or if a paper return goes through additional scrutiny due to discrepancies, these could be signs of potential fraud.
Previously, obtaining an IP PIN was only available to confirmed victims of identity theft. However, as part of the IRS’s ongoing efforts to reduce tax-related fraud and identity theft, it is now open to all taxpayers [^2]. This expansion in eligibility highlights the seriousness with which the IRS approaches this issue.
Why You Should Consider an IP PIN
The average tax refund has recently been estimated at $3,145 [^3]. Imagine investing time and effort into a return that ultimately results in someone else pocketing your rightful funds. Such scenarios are not uncommon as identity thieves have become increasingly sophisticated in their methods.
By applying for an IP PIN, you add an additional layer of protection against this growing threat, potentially saving you the headache and time required to address the aftermath of a tax-related fraud incident.
How to Obtain an IRS Identity Protection PIN
To apply for an Identity Protection PIN (IP PIN), follow these steps:
- Visit the IRS’s IP PIN Tool: Start by accessing the IRS’s dedicated IP PIN Tool at irs.gov/ippin.
- Opt In for the Program: Voluntarily opting in initiates a rigorous identity verification process, which includes submitting your personal information and contact details.
- Gather Necessary Information: To create an online account with the IRS for requesting an IP PIN, you will need the following:
- Your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
- A valid email address
- Mobile phone number
- Your date of birth
- Submit and Verify: Follow the IRS’s on-screen instructions to submit your information. You will receive a confirmation code via text or automated call, which you must enter to verify your identity.
- Retrieve Your IP PIN: After successful verification, the IRS will provide your unique 6-digit Identity Protection PIN. Save this number securely and store it with other important tax documents.
The IRS has also published a helpful list of Frequently Asked Questions for further guidance on the IP PIN program.
Using Your IRS Identity Protection PIN
Once you have your IP PIN, ensure that it is included in every electronic tax return you file. If you are filing a paper return, include your IP PIN along with your signature to avoid unnecessary scrutiny and potential fraud concerns [^2].
Remember to update your IP PIN annually, as the IRS sends a new one each year in mid-December via mail or through its online account. Failure to use the correct IP PIN may result in rejected electronic returns.
Conclusion
The IRS Identity Protection PIN is an effective tool that can help you safeguard your personal finances against tax identity theft and fraud. It requires a minimal time investment, yet it could save you from the headache of having to rectify a stolen refund or a malicious return filed in your name.
As a responsible person conscious of their financial well-being, securing an IP PIN should be a top priority during tax season to ensure that your hard-earned income remains protected.
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