Identity theft and related tax fraud are an ongoing threat. An Identity Protection PIN (IP PIN) from the Internal Revenue Service (IRS) can help provide protection from return-related tax fraud.
Identity theft is commonplace. Years ago, online theft of information resulted in quick consumer alerts and oftentimes a free subscription to a credit protection service. Not so much anymore. Data breach is now common and seemingly unavoidable across the industry. MGM Resorts recently suffered a data breach it is calling a cyberattack that is expected to cost the enterprise approximately $100 million. Along with data, research, and valuable intellectual property, bad actors often aim at personally identifiable information (PII).
The Privacy Act of 1974 protects consumers from disclosure of personal identifiers which can be name, address, telephone number, Social Security number, and more. Hackers target large databases to exfiltrate PII to sell or create synthetic identities. For hackers focused on tax returns, the goal is oftentimes access to a tax refund.
According to the IRS, an IP PIN can help you with the following:
- An IP PIN is a good idea if you are aware that your PII has been compromised or you are already a victim of identity theft. Bad actors with your PII could compromise your tax return and gain access to your tax return.
- With an IP PIN, you can protect your Social Security number or Individual Taxpayer Identification Number (ITIN), and that of dependents.
You can register online for an IP PIN where you will be asked to validate your identity. In certain instances, if you are not able to validate your application online, you can file an application for an IP PIN or request in-person validation. You will need one current government-issued photo ID and one other form of ID.
A couple of things to know:
- An IP PIN is a six-digit number that is valid for one year, with a new number generated each year.
- The number is used when you file your tax return to protect your return, ITIN, or SSN, and help you avoid identity theft. Your IP PIN can be entered as you prepare your tax return via software, on a paper tax return, or provide it to a tax professional you can trust.
- When you use the IP PIN, be sure to enter the number correctly to avoid rejection or suspension of your tax return.
- Keep your IP PIN confidential. The IRS will never require or ask you for the number. Anyone asking for your IP PIN in person, via social media, online, or via telephone is likely a scammer.
With the new tax season just a few months away, an IP PIN can help protect your tax refund and your identity—and perhaps save you the hassle and frustration of identity theft.
Experienced tax attorneys help you with offshore tax questions, compliance, and tax litigation
From offices in Chicago and Cleveland, Robert J. Fedor, Esq., LLC offers strategic legal guidance to clients throughout the U.S. and abroad on IRS audits, criminal tax investigations, and payroll tax issues. When you have questions about individual or business tax compliance, call us at 800-579-0997 or contact us.