Everything You Need To Know About The Identity Protection PIN (IP PIN) Program

Since identity thefts reported to the Federal Trade Commission are extremely common in 10 locations as reported to the Federal Trade Commission, the Internal Revenue Service has expanded eligibility for its Identity Protection Pin (IP PIN) test program to taxpayers. The 10 locations include the original three test sites - Washington, D.C., Florida and Georgia - and seven new states - California, Delaware, Illinois, Maryland, Michigan, Nevada, and Rhode Island.

The IRS wants the data on volume and capacity to make sure that systems are capable of handling the demand so they had to do a phased rollout. 

The IRS may be able to expand the “Get an IP PIN” tool eligibility found at the IRS Website to taxpayers in all states at a later date if this controlled rollout becomes a success.

What Is An IP PIN?

Taxpayers are assigned by the IRS with a six-digit number called IP PIN to help prevent the wrong use of their Social Security Number (SSN) on federal income tax returns that are not theirs or are fraudulent. A fraud will no longer be able to file a tax return on the IP PIN holder’s SSN because the PIN allows the IRS to verify a taxpayer’s identity at the time of filing.

The IRS’ system will reject a return that was e-filed with your SSN and an incorrect or missing IP PIN until you submit it with the correct IP PIN or you file on paper. The agency will delay the processing of your return and any refund you may be due if you still filed with the incorrect or missing IP PIN in order to protect you and while the IRS determine if it’s really yours.

How Will The Expanded Test Project Work?

If you filed a tax return last year from one of the 10 locations mentioned above, you may go to the Get an IP PIN tool, authenticate their identities and obtain an IP PIN. A rigorous two-factor authentication process called Secure Access is needed to validate your identity as security is an important factor to consider. If you are a confirmed victim of tax-related identity theft or your case has already been resolved, the IRS will keep on issuing IP PINS by mail to you. However, you still have the option to use the “Get an IP PIN” tool to obtain an IP PIN as soon as possible.

How To Deal With Tax-Related Identity Theft

Make sure you respond immediately if the IRS sends you a notice or letter informing you that someone used your SSN to get a tax refund or saying there’s another problem. Follow the instructions written in the letter.

• There’s a telephone number given in the letter that you can use to call the IRS. To help verify your identity, have the letter with you, the copy of your prior year’s tax return as well as your IP PIN if you already obtained it. For more information, you may visit the IRS’s guide, IRS Identity Theft Victim Assistance: How It Works.

If you didn’t get a letter from the IRS and you think someone used your SSN to file for a tax refund, use IdentityTheft.gov to report it to the IRS and FTC and get a recovery plan.

• You may complete and submit an IRS Identity Theft Affidavit  (IRS Form 14039) found at IdentityTheft.gov. Submitting it to the IRS can be done online and will allow them to start resolving your case right away. You will also be asked to report the identity theft to the FTC.
• You must pay any taxes you owe and file your tax return. You have two options when filing, either through an e-file or through mailing a paper return.

The next step to repairing identity theft is limiting the potential damage from being exposed to fraud again. You may put a fraud alert on your credit reports, order your free credit reports and close any new accounts under your name, and consider placing a credit freeze on your credit reports. Prevention is always better than cure so save yourself the hassle by making sure your personal information is protected as it should be.