IRS Fraud Prevention and Identity Protection PINS
The Internal Revenue Service (IRS) plays a critical role in ensuring that tax refunds are issued accurately and securely. However, tax fraud and identity theft have increasingly become major challenges. Every year, cybercriminals exploit sensitive personal information to file fraudulent tax returns, diverting refunds to their own accounts. To combat these threats, the IRS has adopted stringent measures to protect taxpayers, including offering an Identity Protection PIN (IP PIN) program. Read on to discover how the IRS is addressing fraudulent refunds and how you can further safeguard your financial identity.
How the IRS is Fighting Back
To counter these threats, the IRS has implemented a series of robust measures, including:
Enhanced Verification Processes
The IRS uses sophisticated algorithms and filters to detect fraudulent returns. Returns that appear suspicious are flagged for further review. Additionally, the IRS matches W-2 forms from employers with the information on tax returns to ensure accuracy.
Data Sharing with Financial Institutions
By partnering with banks and other financial institutions, the IRS can quickly identify, and intercept refunds sent to fraudulent accounts.
Public Awareness Campaigns
The IRS regularly educates taxpayers about the dangers of tax fraud and how to recognize phishing scams and other attempts to steal personal information.
Identity Protection PIN Program
Perhaps one of the most effective tools in the fight against tax identity theft is the Identity Protection PIN (IP PIN) program, which provides an extra layer of security for taxpayers. The primary taxpayer, as well as their spouse and dependents, are eligible for an IP PIN if they can pass the identity verification process.
What is an Identity Protection PIN (IP PIN)?
An IP PIN is a unique six-digit number assigned by the IRS to eligible taxpayers. This number is used to verify your identity when filing your tax return, ensuring that only you or your authorized representative can file using your Social Security number.
The IP PIN changes every year and is known only to the taxpayer and the IRS. If a return is filed without the correct IP PIN, it will be automatically rejected, protecting your refund from unauthorized access. You can compare the IP PIN to a key that can unlock your taxpayer account, which is not available without the key. Even though you may not have a filing requirement, an IP PIN still protects your account as it can prevent a fraudulent return from being filed.
How to Obtain an IP PIN
The IP PIN program was initially limited to victims of identity theft, but it has since been expanded to include any taxpayer who wishes to enroll. It is a voluntary program. Here's how you can get your IP PIN:
Create an Account on the IRS Website
This process requires verifying your identity, which involves providing personal information and answering security questions. You can start the process by visiting www.irs.gov and searching “identity protection pin”. You will then see a prompt to “Get An Identity Protection PIN" (IP PIN).
Complete the Verification Process
After verifying your identity, you'll receive your unique IP PIN. This number is typically available immediately after completing the application process.
Use Your IP PIN Each Year
Make sure to include your IP PIN when filing your tax return. You will receive a new IP PIN annually, which can be accessed through your IRS account. An IP PIN is issued each calendar year and is only available in your online account. The IRS does have an annual shutdown to update their systems beginning in mid-November and ending in mid-January. During this time the online system won’t be available. If you hire a paid preparer to file your taxes, you need to give them your IP PIN. This includes an IP PIN your spouse and/or dependent(s) received. Failing to do so will cause your return to be rejected and delay your filing.
Additional Steps to Protect Yourself
In addition to obtaining an IP PIN, you can take other steps to protect your financial identity:
File Early: The earlier you file your tax return; the less time fraudsters have to file a fraudulent return using your information.
Use Secure Methods: Avoid sharing personal or financial information over email or unverified websites. Always use secure, encrypted platforms to submit sensitive information.
Monitor Your Accounts: Keep an eye on your financial accounts and credit reports for any signs of unauthorized activity.
Stay Vigilant
The IRS is committed to safeguarding taxpayer data and preventing fraudulent refunds. By enrolling in the IP PIN program, you can add an additional layer of protection to your tax returns, ensuring that your hard-earned refund is safe from identity thieves. Don’t wait for tax season to take action—secure your financial identity today and stay one step ahead of potential fraudsters. For more information on IP PINS, contact us!
