For years the IRS has issued Identity Protection PINS to proven victims of tax-related identity theft. The number is mailed to the taxpayer every year and is used to file all federal returns, both electronic and paper. This year the IRS will allow eligible taxpayers to apply for IP PINs to prevent falling victim to identity theft. Applications are accepted only between mid-January and mid-November and can be made only by eligible taxpayers.
Which taxpayers are eligible to apply?
Each applicant must have a valid Social Security or Individual Taxpayer Identification number. Adjusted gross income may not exceed $72,000, and the taxpayer needs access to a telephone. If a joint return is filed, both parties should apply.
What is the process to apply?
- Form 15227, which can be mailed or faxed to the IRS (https://www.irs.gov/pub/irs-pdf/f15227.pdf)
- the Get an IP PIN tool on the IRS website. If the taxpayer doesn’t already have an IRS account, one will need to be set up (https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin)
- an in-person visit to a taxpayer assistance Center where the taxpayer’s identity is verified. For this, two forms of identification are required, one a government issued photo ID.
Receiving and Using Your PIN
Whichever method is chosen, the individual taxpayer receives by mail a CP01A Notice with the IP PIN, and each year a new, unique number is generated and sent to the taxpayer. Therefore it is crucial for the IRS to have the valid mailing address for every holder of an IP PIN. IF THE ADDRESS CHANGES, Form 8822 must be filed. At this time, once the taxpayer opts to receive the IP PIN, there is no mechanism to opt out (although one is supposedly coming).
The IP PIN must be provided on every tax return filed during the year by the taxpayer, including prior year returns. It should be shared with no one except the tax preparer. If the taxpayer loses the PIN or doesn’t receive it, the number can be retrieved using the Get an IP PIN tool (see above). This is not a number you want to guess at, especially when it is so easy to retrieve.
Why would a taxpayer want to go through with getting this PIN, especially when there’s no indication that identity theft has occurred? In our experience, more and more individuals every year are having their refunds delayed because the IRS is asking for identity verification. Many taxpayers when they are notified that they need to contact the IRS to verify who they are think it’s a hoax and throw the notice out, further delaying their refunds. Having the IP PIN should eliminate this delay.
Remember that this PIN is used only when a return is filed and that it was issued by the IRS itself. The IRS is never going to call, text, write, or email to ask what that number is. That IS a scam!
Article Submitted by – Lois S. Fried, CPA, CFE, CVA, ABV
 Forms 1040, 1040-PR, and 1040-SS only