One of the biggest nightmares to straighten out is someone stealing your name and social security number and filing a fake tax return with that information. It can take up to a year to straighten out the mess and your refund is held until it is done. But, a very simple added precaution can stop those thieves dead in their tracks. It is called an IP Pin. If that pin number is not on your return, (you get a new one each January) then the IRS will not accept your return electronically. Period. So they can steal my name/SS# and try to file a return to get that free government money, but it will do them no good.
Just make sure that you understand the rules for using and retrieving your IP PIN. And don't apply for one until you get this year's refund because it automatically locks your account. So here is how it works:
A taxpayer may receive an IP PIN if the taxpayer:
- Is a confirmed victim of tax-related identity theft, or
- Requests an IP PIN
Once a taxpayer signs up for an IP PIN, there is currently no option for the taxpayer to discontinue using it in a later year. An incorrect or missing IP PIN will result in the IRS rejecting an e-filed return. A paper return without an IP PIN will be delayed until the taxpayer is able to verify the taxpayer’s identity with the IRS.
When a taxpayer opts into the program the system generates a new IP PIN each year and it is mailed to them mid-January. The fastest way to retrieve the new IP PIN is via the IRS’s “Get an IP PIN” tool. The only way to access the IP PIN tool online at this time is through the ID.me security process.
Taxpayers may call the IRS for specialized assistance at 1-800-908-4490 if they’re unable to retrieve their IP PIN online. The assistor will verify the taxpayer’s identity and mail the IP PIN to the taxpayer’s address of record within 21 days. However, the IRS states that if the taxpayer hasn’t retrieved the IP PIN online by Oct. 14 of the filing year, the taxpayer’s best alternative is to file the return on paper without the IP PIN.
In any case, the IRS does not simply start mailing IP PINs to taxpayers who don’t retrieve them.
When the IRS first started this program, you had to have had your identity stolen and this was part of the restoration process. A few years later they opened it up to anyone living in one of the states that had the worst record of identity theft - like Florida. After this success test, they opened the option nationwide for anyone to wanted to protect themselves from tax identity thieves.
You may want to seriously consider it.
See Get an Identity Protection PIN (IP PIN) and Retrieve Your Identity Protection PIN (IP PIN) for more details on the IP PIN program.