Taking steps to protect your identity, especially when it’s in relation to your personal tax affairs is vital now that cases of fraud continue to be an issue. Despite the best efforts of the IRS, and even if you have the best identity theft protection, it’s still possible to become a victim of fraud.
If criminals get hold of your Social Security number, and other personal details, they may go after your tax refund too, which is even more stressful as it could leave you out of pocket. If you have been unfortunate enough to become a victim of tax identity fraud then there are additional steps you can subsequently take so that it hopefully doesn’t happen again.
Central to this is the option for getting an identity protection PIN, or IP PIN. These are issued by the IRS and consist of a six-digit number that will stop anyone else from filing a tax return if they’ve managed to get hold of your Social Security number. Obtaining one will require some effort, but this is a good route to take if you feel that you need an extra level of protection following ID theft.
Unsurprisingly, the IRS doesn’t hand out IP PIN’s in a haphazard fashion, so you’ll need to be a confirmed victim of identity theft in order to qualify for one. After the IRS has concluded its identity theft investigations and is happy that your tax account issues have been corrected then you’ll be in line for a CP01A Notice. This is the official notice that explains what the IP PIN is and why you’re being issued with one.
Once you start getting an IP PIN each one issued will last for twelve months. This means that a new one is sent out every year. Each time you get a replacement you will also receive instructions on how to use the unique 6-digit IP PIN and this will need to be entered each time you are filing official forms, which include Forms 1040, 1040-SR, 1040-NR or 1040 PR/SS.
Each taxpayer who gets an IP PIN must use the unique ID whenever an electronic tax return is being filed. According to the IRS this includes the primary taxpayer, spouse and dependent. Similarly, taxpayers needs to enter the ID number if filing using a paper return too, and there are some useful pointers on precisely what needs to be done on the IRS page outlining these steps.
As you’d expect for something so vital in maintaining security and protecting your personal data, the IP PIN needs to be looked after. It should not be disclosed to anyone else, aside from a tax preparer if you are using the services of one. Failure to use it on the official forms will also mean that your filed return will be rejected too, which could result in even more stress.
Be sure to keep your CP01A notice along with any new ID PIN you get each year in a secure location, ideally along with your tax records.
Getting the IP PIN
You’ll obviously need to be a confirmed victim of identity theft in order to get an IP PIN. The IRS can send you one in the mail, which will be contained in a CP01A Notice. However, this is dependent on your identity theft case being resolved before the start of the next tax filing season.
The other route to an IP PIN is if you’re volunteering for the IP PIN Opt-In Program. This involves using the online Get an IP PIN tool, and you’ll be required to have an account on IRS.gov. This is needed so that you can subsequently validate your identity. It’s worth spending some time reading up on the processes for the secure access identity authentication process.
There are also steps in place if you happen to lose your CP01A Notice so that you can still retrieve your IP PIN number. Similarly, if you’re not able to get the IP PIN using the online tool then it is possible to fill in an application, or by obtaining in-person authentication in order to process a request. However, using these other methods could mean there will be a delay in receiving your IP PIN.
IP PIN usage
Once you’ve managed to get your IP PIN the unique number will need to be used if you’re working with tax software products for accounting and tax filing purposes. It’s also imperative that the IP PIN number is entered correctly, because if it isn’t it could cause further issues along with potential delays when you’re sorting out tax filing tasks.
It’s also crucial to ensure that the IP PIN doesn’t get shared with anyone, aside from a tax professional whose services you might be using for tax filing. Remember that the IRS will never ask for your IP PIN, so beware of any dubious communications that are requesting it. Any kind of phone call, email or text that is asking you to submit your IP PIN should be ignored as they will doubtless be scams.
Although it may seem like quite a lot of effort, getting yourself an IP PIN could make life easier in the long run. If you’ve been a victim of personal identity theft, especially when it comes to tax affairs, this is still one of the best ways to counter criminal activity. And, because the number is renewed each year, it does make life harder for fraudsters who might have exploited your personal details on previous occasions.