Starting in Mid-January, 2021, the Internal Revenue Service will begin allowing all taxpayers to receive an Identity Protection Personal Identification Number (IP PIN).
The IP PIN is a six-digit number assigned by the IRS to eligible taxpayers to assist in minimizing federal tax refund fraud. The purpose of the IP PIN is to help the IRS verify the taxpayer’s identity, which in turn helps to prevent the misuse of the taxpayer’s Social Security number on fraudulently filed federal income tax returns. When an IP PIN is issued, the taxpayer must include it on their tax return in order for the return to be processed by the IRS.
Prior to the expanded program, IP PINs were reserved mainly for taxpayers who were victims of identity theft. With the expanded program, all taxpayers can proactively protect themselves against identity theft by electing to opt into the program.
To obtain an IP PIN, the IRS recommends going to their website at www.IRS.Gov/ippin and using their online “Get an IP PIN” tool. This is the preferred method and the only one that immediately provides the PIN to the taxpayer. This feature will be available starting in mid-January 2021. The online tool uses Secure Access Authentication, which uses several different ways to verify a person’s identity.
What taxpayers need to know about the IP PIN before applying:
- Taxpayers who want to voluntarily opt into the IP PIN program do not need to file a Form 14039, Identity Theft Affidavit.
- The IP PIN is valid for one year. Each January, the taxpayer must obtain a newly generated IP PIN.
- The IP PIN must be properly entered on electronic and paper tax returns to avoid rejections and delays.
- Taxpayers with either a Social Security number or individual tax identification number (ITIN) who can verify their identities are eligible for the opt-in program.
- Any primary taxpayer (listed first on the return), secondary taxpayer (listed second on the return), or dependent may obtain an IP PIN if they can pass the identity confirming requirements.
- If taxpayers find they do not like this process, the IRS plans to offer an opt-out feature to the IP PIN program in 2022.
Taxpayers who are unable to authenticate their identity online can follow alternative procedures to obtain an IP PIN. Those with an income of $72,000 or less should complete Form 15227 “Application for an Identity Protection Personal Identification Number,” and mail or fax it to the IRS. Taxpayers with income greater than $72,000 may make an appointment to visit a Taxpayer Assistance Center to obtain an IP PIN in person, after which the IP PIN will be mailed within three weeks. The IRS emphasizes that taxpayers who obtain an IP PIN should only share it with their tax preparer.
Additional information regarding the IP PIN program can be found at www.IRS.Gov/secureaccess. If you have any issues obtaining an IP PIN or have further questions about the IP PIN program, please contact Gregory Rascher, Paul Erickson, or one of our tax advisors at 301.231.6200.