Identity Theft Protection Tip

If you have concerns about protecting your personal data during tax filing season, or just generally want to take an simple yet effective step to enhance your financial health, try this: The IRS has been offering an identity theft protection program for several years, called Identity Protection PIN (or “IP PIN”). The IRS originally offered IP PIN only to confirmed identity theft victims, but has since made the program available to all taxpayers, making it one of the most straightforward ways to keep your tax information safe.

An IP PIN is a special code issued by the IRS that provides an extra layer of security when filing your tax return. IP PIN’s core purpose is to stop identity thieves from using your personal information – like your name and Social Security number – to submit fraudulent returns and steal your tax refund. When you have an IP PIN, the IRS expects to see this unique 6-digit number on your tax forms each year, effectively blocking prying eyes (i.e. “ne'er-do-wells”) from successfully filing under your identity.

To obtain an IP PIN, you go through a verification process that ensures you are indeed the person you claim to be. The IRS typically asks for proof of identity through questions about your personal, tax and financial history. Once you complete that verification, you will receive your IP PIN, which the IRS updates every year. Each time you file a return – whether electronically or by paper – you must include the current code to confirm your identity. If you or your spouse or dependents don’t enter the right IP PIN, your return will be rejected, so you’ll want to store this code securely.

Once you have your IP PIN, filing your tax return with the IP PIN is not difficult: There’s a dedicated line or box on most tax software and forms where you enter your 6-digit number. By doing this, you’re effectively telling the IRS that it’s you who is trying to unlock your tax account. If, on the other hand, someone tries to file a return under your identity without the IP PIN, the IRS will recognize that it is not you and take steps to protect your account. 

Keep in mind that, even if you don’t think you have to file a return this year, having an IP PIN ensures no one else can file one on your behalf to claim a fake refund. 

Because the IP PIN expires each year, once you register you’ll receive a new one when the next tax season approaches. If at any point you lose your IP PIN or suspect that your PIN has been compromised, the IRS has a process to help you retrieve or reset it after verifying your identity again. It is important to safekeep your IP PIN as you would any sensitive personal information, since handing it to the wrong person would defeat its protective purpose. 

Using an IP PIN is a straightforward and effective strategy to reduce the risk of tax-related identity theft. Here’s where to sign up: https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin

Thank you to Yousef Yiyadi for his assistance with this article!

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