IP PINs: What they Are, How They Protect You, and How to Get One

Peacock & French CPAs
Apr 01, 2021

Every tax season, hundreds of taxpayers become prey to tax scams. One of the most common scams out there is for a thief to file a false return using your name and Social Security number. How can you avoid becoming a victim of this scam? IP PINs may be the answer.

Every tax season, hundreds of taxpayers (if not more) become prey to tax scams. One of the most common scams out there is for a thief to file a false return using your name and Social Security number. They collect the refund you’re do from the federal and/or state government, and slip away with it unnoticed—until you file your legitimate tax return and learn one has already been filed for you. How can you avoid becoming a victim of this scam? IP PINs may be the answer. Keep reading to learn more about them.

What Is an IP PIN?

IP PIN is short for Identity Protection Personal Identification Number. It’s a unique identification number assigned to you by the IRS and used for verifying your identity when you file your return. IP PINs have actually been around for a while, but were used exclusively for current victims of tax fraud, so they could verify which tax return was the legitimate one.

However, in 2010, the IRS began expanding the IP PIN program and started using it as a proactive measure to prevent the tax fraud from occurring in the first place. At first, these numbers were only available to taxpayers in a few states, but the program has gradually expanded, and now, all taxpayers are eligible for an IP PIN for the 2021 tax season.

How to Get One

The IP PIN program is an opt-in program, so the IRS will not automatically assign you one. You must apply for one by visiting IRS.gov/IPPIN and use their Get an IP PIN tool. You will then be required to verify your identity through a very thorough authentication process. Make sure you have all of the necessary information on hand to get through the process more quickly. You can find out what you need here.

Once you verify your identity, you’ll automatically receive your 2021 IP PIN. This PIN is only good for this year, and you’ll be given a new one each year hereafter. Once you’ve opted into the IP PIN program, you cannot file a return without your current IP PIN. Any returns filed without the correct identifying number will automatically be rejected. If you file electronically, you’ll be prompted to input your IP PIN before you can submit your return. If you file by mail, you will write in your IP PIN near the signature line on your return.

Currently, there is no opt-out process for the IP PIN program, but the IRS is working on developing one for 2022. If you opt in, you will continue to receive new IP PINs every year until you opt out.

How It Works

So how does this new identifying number help to protect your return? Isn’t your Social Security number an identifying number? The primary difference here is in the fact that you’ll get a new IP PIN every year. Once a tax scammer gets a hold of your SSN, they know that the number is not going to change. They can file a return in your name at any time, and possibly even multiple times with the same number.

But once you opt into the IP PIN program, you’ll get a different number every year for use on your tax return. This makes it much more difficult for a thief to file a false return in your name, because they would need to acquire not only your SSN, but the correct IP PIN for your return for the current year. This added level of protection significantly decreases your likelihood of becoming a tax scam victim.

Who Should Have an IP PIN?

There’s really no reason not to get an IP PIN. Now that all taxpayers qualify, everyone can benefit from an extra level of security and protection for their tax returns. However, if you know you’ve had your personal information stolen in any recent data breaches, it’s even more important to protect yourself from this kind of fraud.

It’s also a good idea to get an IP PIN if you usually wait until later in the tax season to file your return. The longer you wait to file, the easier it is for tax scammers to file their false return first and claim a refund in your name. An IP PIN can protect you from this and save you a lot of headaches.

If you’re interested in receiving an IP PIN, use the links in this article or contact us at Peacock & French CPAs to learn more and get assistance with receiving one. And remember, once you do get an IP PIN, you should never share it with anyone but your trusted tax preparer.