You know you need to take steps to keep your credit card numbers and Social Security number from falling into the wrong hands. Do you know thieves also want to steal your federal income tax return? Or, more precisely, your tax refund.
In 2019, the IRS received 137,000 reports of tax-related identity theft from taxpayers. The number of fraudulent tax returns is actually going down. The IRS handled 199,000 reports of identity theft in 2018, 242,000 reports in 2017, and 401,000 in 2016. Part of the reason for this progress is the Identity Protection Personal Identification Number, or IP PIN.
What Is An IP PIN?
An Identity Protection PIN is a six-digit number from the IRS. It helps taxpayers avoid having a fraudulent tax return filed using their Social Security number (SSN).
Once the IRS assigns you an IP PIN, you cannot electronically file your tax return without it. You need to enter your IP PIN on the second page of your Form 1040 or Form 1040SR, to the right of your signature.
If you try to e-file your federal tax return without it, the IRS will reject your tax return, and you’ll have to file by mail. If you file a paper return without your IP PIN, the IRS will take longer to process your return while they take extra steps to confirm your identity. In the meantime, they’ll hold on to any refund you might be entitled to.
Until now, IP PINs were only available to identity theft victims and residents of Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Texas, Washington, and the District of Columbia.
Starting in mid-January of 2021, anyone can voluntarily opt into the IP PIN program to proactively protect themselves from tax-related identity theft.
How To Get An IP PIN
In recent years, the IRS mailed letters to confirmed identity theft victims assigning them an IP PIN number and sent letters to others inviting them to apply. If you’re already in the IP PIN program, you’re in it for life. There’s no need to reapply because the IRS will send you a new PIN in the mail every January. Otherwise, you’ll need to apply online.
Step 1: Set Up Your Account On IRS.gov
If you don’t already have an IRS.gov account, you’ll need to set one up to access the IP PIN online tool.
When you register, the system will ask questions to verify your identity. The IRS recommends having the following information ready before you register:
- Email address
- SSN or Individual Tax Identification Number (ITIN)
- Tax filing status and the mailing address used on your most recent tax return
- A financial account number linked to your name, such as a major credit card, student loan, mortgage or home equity loan, home equity line of credit or auto loan
- A mobile phone linked to your name or the ability to receive an activation code by mail
It takes around 15 minutes to sign up for an IRS.gov account, and the time you spend is well worth it because it gives you access to a variety of self-service tools. You can use your login to check on your tax payment history, set up or check on the status of an existing IRS payment plan, make a tax payment, or access copies of your tax transcripts.
The IRS uses two-factor authentication, so each time you log into your account, the system will text you a security code that you’ll need to enter to access your account.
Step 2: Request An IP PIN
Once you have an IRS.gov account, go to the Get an Identity Protection PIN page and click on the blue Get an IP PIN button. The system will walk you through the process of applying, including verifying your identity (again). Once you pass the IP PIN security authentication, your IP PIN will appear on the screen. Print the page or make a note of the number and store it somewhere safe.
Remember, your IP PIN is valid for one calendar year, so you’ll need to get a new one each year. If you don’t receive your new IP PIN in the mail, you can log into your IRS.gov account to retrieve it before filing your tax return.
Note that the Get an IP PIN tool is typically unavailable mid-November through mid-January each year for scheduled maintenance.
Alternatives To the IP PIN Online Tool
Some taxpayers have trouble validating their identity through IRS.gov. There are a couple of alternatives if you run into that problem:
Apply By Mail
You can apply by mail as long as your income is $72,000 or less. Complete Form 15227, providing your SSN or ITIN, gross income, and phone number. The IRS will use the phone number you provide to call you, validate your identity, and assign you an IP PIN for the next tax filing season. You won’t be able to use it for the current filing season.
Apply In Person
If you don’t meet the income requirements to file Form 15227, you can apply in person at a Taxpayer Assistance Center. You’ll need to bring a photo ID plus another identification document to prove your identity, such as a Social Security card, passport, or birth certificate.
Once the IRS verifies your identity, you’ll receive your IP PIN via mail within three weeks.
Go to the IRS website to find a Taxpayer Assistance Center near you. You’ll need to call to schedule an appointment, as they do not accept walk-ins.
How To Retrieve A Lost IP PIN
If you misplace your IP PIN letter, you can log into your IRS.gov account to retrieve it or call the IRS at 1-800-908-4490 to ask them to reissue your IP PIN.
IP PINs are used on your federal income tax return. They don’t confer any other benefits, and you don’t need them to request an extension, apply for an installment agreement, or file your state income tax return,
Now that IP PINs are widely available, having this extra security when filing your tax return isn’t a bad idea. Security breaches seem to occur on almost a daily basis. If your personal information is compromised, having an IP PIN at least means you won’t have to deal with a fake tax return on top of everything else.