Protect Yourself from Tax Identity Theft with an IRS IP PIN
Every year, a particularly unpleasant crime occurs: identity thieves file fraudulent tax returns using stolen data, and they quickly claim the refunds before the real taxpayers can file. The consequences can be lengthy and frustrating, with taxpayers facing months, or even years, of red tape to resolve the issue.
The IRS offers an Identity Protection PIN (IP PIN) to help prevent this form of identity theft. This six-digit PIN is similar to a password and is used when filing taxes, adding an extra layer of security to your returns.
How the IP PIN Works
To obtain an IP PIN, you’ll first need an online account with the IRS if you don’t already have one. The IRS online account requires you to complete a verification process, which involves providing information that the federal government likely already has. Once registered, generating the IP PIN is a straightforward process. You don’t need to remember the PIN, as you can retrieve it when needed. Note that this PIN is different from the five-digit PIN that some people use to file taxes electronically, and you can have both.
The Downsides of Not Having an IP PIN
If someone files a fraudulent return using your information, you could miss out on any tax refunds you’re owed for an extended period. Reclaiming those funds usually involves a prolonged process with the IRS to prove your identity. Former IRS taxpayer advocate Nina E. Olson, now executive director of the nonprofit Center for Taxpayer Rights, stated that laws regarding taxpayer data disclosure exist. Consequences should follow if these laws are violated.
To learn more, the IRS provides a detailed FAQ about the IP PIN system on its website. Taking a proactive step in protecting your tax information is always the smartest move in the world of cybercrime.
