Letting someone else file your tax return sounds like a pretty sweet deal — unless that person is an identity thief after your refund. It happens more often than you’d think. Last year, the IRS flagged 1.1 million tax returns with refunds totaling $6.3 billion for additional review due to suspected identity theft. More than 12,000 of these were confirmed as of March 2, 2023.
No one wants to be in that situation. Fortunately, the IRS has developed a strategy that can reduce your risk of tax identity theft. Roughly 6.1 million Americans took advantage of it last year. Here’s how to decide if it’s right for you this tax season.
It’s like a password for your tax return
To combat tax identity theft, the IRS created Identity Protection (IP) PINs. These are six-digit, personalized numbers that you must enter when filing your tax return, either electronically or on paper. A return filed without the code won’t be accepted.
The government automatically gives these PINs to confirmed victims of tax identity theft to help them avoid becoming a victim again in the future. But anyone can apply for an IP PIN for free as long as they have a valid Social Security number or individual taxpayer identification number (ITIN).
It’s not a must-have. You can file your taxes without an IP PIN as long as you haven’t been a victim of tax identity theft before. But it can happen to anyone. This is a simple step that’s worth the effort if you’re concerned about having your identity — or your tax refund — stolen.
How to apply for an IP PIN
The simplest way to apply for an IP PIN is to use the IRS’s online tool. You’ll have to answer some identity verification questions so the government can ensure it’s assigning the code to you and not someone impersonating you. This entails answering multiple-choice questions about things like the streets you used to live on and the bank you have your mortgage through.
If you run into problems with the online tool, you can also fill out Form 15227 and mail it to the IRS. Or you can request in-person identity verification at a local Taxpayer Assistance Center.
Once your application is approved, the IRS will assign you a six-digit IP PIN good for your 2023 tax return. Next year, you’ll have to log back into your account to get your new IP PIN for your 2024 taxes.
Currently, there’s no way to opt out of the IP PIN program. So once you apply for one, you’re committing to taking this extra step with every tax return you file going forward.
How to enter your IP PIN on your tax return
If you’re filing your taxes on your own using tax software, the program should ask you whether you have an IP PIN and prompt you to enter it where appropriate. If multiple people on your return have IP PINs, you must enter each one correctly to file your return.
When using a tax professional, wait until you’ve reviewed the return and confirmed its accuracy before handing over your IP PIN. Some identity thieves pose as tax preparers to steal your information. Checking over your return before it’s submitted is the easiest way to avoid this. And be careful not to give out your IP PIN to anyone except your tax preparer.
If you have any questions about your IP PIN, you can consult the IRS’s FAQs or contact the IRS for further information.
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