IRS Offering ID Protection PIN Program to Everyone in 2021

With so many hackers stealing identities and filing tax returns fraudulently, the IRS has decided to open up their ID Protection PIN Program to everyone in 2021.

What is the ID Protection Program?

The Internal Revenue Service has a program called the Identity Protection PIN (IP PIN) program for identity theft victims. 

The IRS assigns someone who applies with a six-digit number that uniquely identities them so when they file their tax return; the IRS can confirm their identity. Essentially, this program prevents anyone else from filing a tax return in your name. Using the PIN, you can file electronically or through the mail. The number is only known by you and the IRS. 

How is it Used?

In the past, you had to apply for this service, and only if you were deemed eligible could you participate. First, you would need to confirm that you were indeed the victim of identity theft by filling out an ID theft affidavit. Once you filed that information with the IRS, they would send you a CP01A notice that contained your new IP PIN for the new tax year each year. 

However, in 2021 the IRS is opening up this service to the entire public. According to the IRS, if you want to be included:

• “You must pass a rigorous identity verification process.
• Spouses and dependents are eligible for an IP PIN if they can pass the identity proofing process.”

How to Get an IP PIN

If you have previously filed for an IP Pin, you will receive your new one in the mail before tax time. If you are new to the IP Pin Opt-In Program, the IRS suggests using the IP Pin online tool they have set up. You will need an account on IRS.gov to use it and validate your identity. They note these three points of interest: 

• “An IP PIN is valid for one calendar year.
• You must obtain a new IP PIN each year.
• The IP PIN tool is generally unavailable mid-November through mid-January each year.”

If you have set up accounts in the IRS “Get Transcript,” “Online Account,” or “Online Payment Agreement” areas, you can use that login to get your IP PIN.

If you lose or forget your PIN, you can use the IRS “Retrieve Your IP PIN” tool.

You may also request one through the mail. The IRS has a downloadable form on their website you can print out and mail in. You can also visit an IRS office and request to opt-in, in person. 

How Common is Tax Fraud? 

Tax fraud is a lot more common than you might expect. Each year thousands of Americans have their identity stolen, and fraudsters file bogus tax returns in their name and receive refunds. When these victims file their own tax returns, they are rejected and told someone already filed under their social security number. 

Sometimes scammers intercept W2s or misdirect them and change the victim’s address so that any subsequent tax information or refunds get mailed to them. 

Due to the sheer volume of tax returns, the IRS attempts to get refunds out quickly; however, in doing so, they may miss details that indicate tax fraud. The IRS, along with other government agencies, does not use modern technology and software. Often their systems are outdated and riddled with red-tape, which slows things down and prevents efficiency. That is why identity theft and fraudulent tax issues prevail each year. You can read more about the timing and the reasons behind taxpayer fraud here. 

How to Protect Yourself From Identity Theft and Tax Fraud

When the IRS makes this option available to everyone, visit the IRS website, and sign up in mid-January. Before it becomes available, you can go through their “secure access authentication” process to verify your identity, so you won’t have to do that later.

Once you have set up the account, signing up for the IP PIN will be a breeze later. You will need the following list of information to sign up: 

• Email address
• Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
• Tax filing status and mailing address
• One financial account number linked to your name:
• Credit card –**last 8 digits**(no American Express, debit, or corporate cards)
• Student loan – (Enter the student loan account number provided on your statement. The account number may contain both numbers and letters. Do not include any symbols.) Additionally, we can’t verify student loans issued by Nelnet. 
• Mortgage or home equity loan 
• Home equity line of credit (HELOC)
• Auto loan
• Mobile phone linked to your name (for faster registration) or ability to receive an activation code by mail.