IRS is providing a new tool you can use to help guard against your identity being stolen for tax purposes.  ID thieves attempt to file a fake return using your name and social security number in order to get bogus refunds.  If they can get their hands on your employer’s name and federal id number, even better!  (For them, that is.)  This is why even employer identification numbers are increasingly the target of id thieves, and should be guarded just as carefully as personal social security numbers.

 

Over the last several years IRS has been ramping up systems to identify and reject fraudulent returns.  Among their tools has been the creation of an Identity Protection Personal Identification Number, or IP-PIN.  It’s a 6-digit number they assign, which changes every year and must be included on a tax return in order to authenticate the filer’s identity.

 

Previously IRS only assigned these numbers to taxpayers who had a tax id theft incident, but this month they have opened the program up to anyone who wants to enroll voluntarily.  If you would like to participate for added security, simply go to their website, irs.gov, and type “IP-PIN” in the search box.  The process will step you through a number of verification questions, such as your name and address exactly as it appeared on the last return you filed, and an account number from a bank or credit card account, or a home, student or auto loan.  The whole process doesn’t take more than 5-10 minutes (as long as you have all your information handy!), and you’ll get your number online at the end.  Be sure to print or copy it to a secure place… you can retrieve it again later if needed, but you’ll have to go through another process.

 

If you have been assigned an IP-PIN because of prior tax id theft, IRS will mail you a new number every January.  If you enroll voluntarily, you will log onto their website and retrieve a new number online every year.  Either way, once you’re in the program, you’re in for good.

 

Granted, this is a single-purpose tool that only protects you from someone filing fake returns in your name.  It doesn’t guard against your personal information being used in other ways, such as opening bank or credit card accounts, taking out loans, etc.  And it will require taking an additional step each year to retrieve your new number before filing your return.  On the other hand, it’s a free and fairly easy to add one more layer of protection in an age when identity theft continues to climb, and we recommend you seriously consider enrolling.

 

Whether you decide to enroll or not, always guard your social security number, date of birth and other personal information very carefully!  Never provide them to anyone without being doubly sure of who you’re talking to, especially unexpected phone calls, texts and emails.  And never send them via email, either in the body of the text or as an attachment, as these can be easily intercepted.  Ditto for faxing, as most faxes are now transmitted over the internet and computers, rather than through a dedicated phone line to a physical fax machine as in earlier times.

 

Please feel free to get in touch if you would like further advice or guidance about this or any other tax issues.