The Internal Revenue Service (IRS) is recommending that taxpayers use its IP PIN tool to protect against identity theft even as the tool was earlier compromised by hackers.
“An easy, but important step for taxpayers to take to protect their information is by obtaining an IP PIN from the IRS,” the agency said in a Nov. 29 press release. “The IRS IP PIN is a special six-digit number available to anyone who has a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN) … The IP PIN helps prevent criminals from filling fraudulent federal income tax returns or stealing refunds using taxpayer’s personal information.”
IRS Commissioner Daniel Werfel insisted that IP PIN “serves as a secret weapon to protect taxpayers against identity thieves.” Such criminals “trying to file a tax return in someone’s name will be stopped cold if they don’t have the code that IP PIN participants have.” At present, more than 8.1 million taxpayers use the pin.
In a 2022 annual report to Congress, the Electronic Tax Administration Advisory Committee, a federal advisory committee to the IRS, called IP PIN the “number one security tool” for taxpayers.
“Taxpayers should keep in mind that the IP PIN is only valid for one calendar year. Participating taxpayers must acquire a newly generated IP PIN each January,” the agency states.
Even though the IRS is promoting IP PIN as a key security feature, the tool was previously hacked by criminals. In 2016, there were complaints that IP PINs of some taxpayers were compromised.
At that time, then-IRS Commissioner John Koskinen told The Washington Post that it was only a “relatively minor problem” that affected a “handful” of tax filers.
“We understand that for those taxpayers this is a significant aggravation—by definition, they got an IP PIN in the first place because they'd been the victim of identity theft.”
Getting an IP PINThe IRS is encouraging IP PIN applicants who were previously rejected during the online identity authentication process to “try applying again as the process continues to be refined.”
- They can download Form 15227 “Application for an Identity Protection Personal Identification Number” and file it with the agency to receive their IP PIN. The IRS will contact the phone number provided in the form to verify the applicant’s identity. Once the identity is verified, a pin will be sent via postal mail within four to six weeks.
- They also can visit an IRS Taxpayer Assistance Center (TAC) and request an IP PIN. Taxpayers can find a TAC near their location through this link. A government-issued picture identification document and an identity proof must be brought for verification.
The IRS reminded taxpayers that the agency will “never email, text, or call to request an IP PIN.” Individuals should never reveal such information to anyone other than their tax preparer or tax software provider. Even in such a scenario, the pin must only be revealed when filing returns.
Taxpayer Identity TheftThe IRS’s IP PIN recommendation comes amid the agency’s “ongoing efforts to increase security.” Earlier this week, it warned taxpayers to watch out for “a surge of tax scams” ahead of the holiday and tax season as criminals attempt to steal personal identities.
Tax identity theft is an issue that affects hundreds of thousands of American taxpayers. According to a May 10 report by the U.S. Treasury Department, the IRS identified almost 1.1 million tax returns as being potentially fraudulent for the 2023 filing season as of March 2.
The 1.1 million potentially fake returns had a refund claim totaling around $6.3 billion. The IRS confirmed 12,617 tax returns as fraudulent, preventing the issuance of $105.3 million in refunds to identity theft criminals.
- File a complaint with the FTC at identitytheft.gov.
- Contact one of the three major credit bureaus—Equifax, Experian, and TransUnion—and place a “fraud alert” on the credit records.
- Close all financial or credit accounts opened by identity thieves.