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Protecting Your Tax Return from Identity Theft: What You Need to Know About the IRS Identity Protection PIN

Identity theft in tax filing is an increasingly serious problem that affects millions of Americans each year. Scammers use stolen Social Security numbers (SSNs) to file fake tax returns and claim refunds, causing considerable stress and financial inconvenience for the rightful owner. When identity theft occurs in tax filing, the process to resolve it can be lengthy and challenging, often taking months to resolve. But there’s a way you can help protect yourself from this problem: the IRS Identity Protection PIN (IP PIN).

What is an IRS Identity Protection PIN?

The IRS Identity Protection PIN (IP PIN) is a six-digit number that adds an extra layer of security to your tax return. This PIN is known only to you and the IRS, and it’s required every year when you file your tax return. The IP PIN helps the IRS verify your identity, making it harder for identity thieves to file a fraudulent return using your Social Security number.

Why Do You Need an IP PIN?

Identity thieves are becoming more sophisticated, and the damage they cause is hard to undo. Once someone steals your SSN and files a fraudulent tax return, it can trigger a long and frustrating process to set things right. Here are some of the problems you might face:

• Delayed Refunds: If someone files a return using your SSN before you do, you’ll likely face delays in receiving your refund. You’ll need to file a paper return, which can extend the process even further.
• Time-Consuming Verification Process: The IRS will need to verify your identity and investigate the fraudulent return, which can take months.
• Ongoing Fraud Concerns: Even after the IRS clears up the initial issue, you might still worry about future fraud attempts or other types of identity theft.

By using an IP PIN, you can avoid these headaches and help ensure that only you are able to file a tax return with your SSN.

How to Get an IP PIN

The process of obtaining an IP PIN is straightforward but requires verification steps. Here’s what you need to do:

1. Create an IRS Account: Visit IRS.gov and create an account if you don’t already have one. You’ll need to provide personal information, including your SSN and an email address.
2. Verify Your Identity: The IRS will ask you to verify your identity, which may involve a financial account number, mobile phone, or other identifying information.
3. Obtain Your IP PIN: Once verified, you can receive your IP PIN, which you will need to include on your tax return each year. If you have a previous PIN, remember that you will receive a new one annually.

If you can’t get an IP PIN online, you may apply by submitting Form 15227, or visit an IRS Taxpayer Assistance Center for in-person verification.

Important Reminders About the IP PIN

• Annual Renewal: You must obtain a new IP PIN each tax year. The IRS will send it to you by mail or you can retrieve it online.
• Keep It Safe: Your IP PIN is sensitive information, just like your SSN, so don’t share it. Treat it with the same level of security.
• Filing Requirement: Once you have an IP PIN, you’ll need to include it on your federal tax return every year. Forgetting to include your IP PIN could delay your return processing.

What to Do if You’re a Victim of Tax-Related Identity Theft

If you suspect or discover that someone has stolen your SSN to file a fraudulent tax return, follow these steps immediately:

1. Contact the IRS: Call the IRS Identity Theft Hotline at 1-800-908-4490.
2. File Form 14039, Identity Theft Affidavit: Complete this form to alert the IRS to the identity theft and begin the process of correcting the issue.
3. Check Your Credit Report: Identity theft can extend beyond tax filing, so monitor your credit report for other signs of fraud.
4. Apply for an IP PIN for Future Protection: Even if you hadn’t used an IP PIN before, this is the time to secure one to prevent further fraudulent filings in future years.

The Bottom Line

Tax-related identity theft can be incredibly frustrating, but there are steps you can take to protect yourself. The IRS IP PIN is a simple, effective way to help secure your tax return from fraudsters. By understanding the steps to get and use an IP PIN, you can safeguard your personal information and prevent a complicated resolution process. Remember, protecting your information now can save you significant time and stress later.