IRS Announces Nationwide Expansion of Opt-In Identity Protection PIN Program from January 2021

The Internal Revenue Service (IRS)'s Wage & Investment Division announced a nationwide rollout of the Identity Protection PIN (IP PIN) voluntary opt-in program starting in January 2021. The six-digit IP PIN is designed to provide additional protection against tax-related identity theft.

What Is An IP PIN?

An IP PIN is a six-digit number assigned to eligible taxpayers to help prevent tax frauds in their accounts. The IP PIN works like the security on the back of your bank card, without which, refund transactions cannot proceed. The PIN is used for Forms 1040, 1040PR, and 1040SS but not for amended returns or for extension requests.

Once an account holder has an opt-in IP PIN, their tax return will not be processed if it is filed with an incorrect or missing PIN number. Every IP PIN number is associated with that taxpayer's Social Security Number (SSN), hence has a unique identification for every account. In the case of paper filing, the IRS will hold back the refund process until they can verify the genuineness of the request and user, in case of a missing or incorrect PIN number.

How It Works

January 2021 onwards, the IRS website will display a 'Get an IP PIN' tool link. Once users pass the security authentication, they can access their six-digit IP PIN. Tax Payers with a Social Security number (SSN) or Individual Tax Identification Number (ITIN), and valid identity documents/authentication, can go for the Opt-In program. This PIN has to be entered when filing for tax returns by the taxpayers or their accountants. The IRS has kept this system voluntary so far.

For people who cannot authenticate their accounts online, IRS is working on a solution where they can visit the nearest IRS office and get it done manually. This process might involve a series of questions to verify the identity and authentication of some documents. This process is still being vetted.

IP PINs are not tax filing pins which are 5-digit numbers used to file taxes. Additionally, IP PINs are valid for only one year and have to be renewed every year for security purposes.

A New System

IRS introduced the IRS PIN system a year ago to deal with identity theft and tax fraud. In the first phase, only victims of identity theft and tax fraud were given the PIN numbers. Eventually, the IRS rolled out voluntary opt-in for the PIN in selective states, viz. Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Texas, or Washington.

The IRS had declared earlier that the system would eventually be rolled out to everyone, and the current nationwide expansion seems to be in line with that announcement.

More changes and announcements are expected as we move forward in this regard. Watch this space for more. If you are looking for assistance with getting an IP PIN, feel free to reach out to one of our professionals at AAABSI and we would be happy to help you.