6.1 million Americans did this last tax season to prevent identity theft.

Having someone else file your tax return sounds like a very good deal. After the refund, unless the person is an identity thief. It happens more often than you think. Last year, the IRS flagged 1.1 million tax returns and refunds totaling $6.3 billion for further review due to suspected identity theft. Of these, more than 12,000 have been confirmed as of March 2, 2023.

No one wants to be in that situation. Fortunately, the IRS has developed strategies to reduce your risk of tax identity theft. Last year, approximately 6.1 million Americans enjoyed this benefit. Here’s how to decide if it’s right for you this tax season.

Same as your tax return password.

To prevent tax identity theft, the IRS created the Identity Protection (IP) PIN. This is a six-digit personal number that you must enter when filing your tax return electronically or on paper. Returns submitted without a code will not be accepted.

The government automatically provides these PINs to verified victims of tax identity theft to help prevent them from becoming victims again in the future. However, 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 strictly necessary. Unless you have previously been a victim of tax identity theft, you can file your taxes without an IP PIN. But this can happen to anyone. This is a simple step that’s worth the effort if you’re concerned about your identity or tax refund being stolen.

How to apply for an IP PIN

The simplest way to apply for an IP PIN is to use the IRS’ online tool. You will be asked to answer a few identity verification questions to ensure that the government is assigning the code to you and not someone pretending to be you. This involves answering multiple-choice questions about things like the street you lived on and the bank you secured your mortgage with.

If you are having trouble with the online tool, you can also fill out Form 15227 and mail it to the IRS. Alternatively, you may request identity verification directly from your local Taxpayer Assistance Center.

If your application is approved, the IRS will assign you a 6-digit IP PIN appropriate for your 2023 tax return. Next year, you’ll need to log in to your account again to get a new IP PIN for your 2024 taxes.

There is currently no way to opt out of the IP PIN program. So once you apply, you are committing to take this extra step for each future tax return you file.

How to Enter Your IP PIN on Your Tax Return

If you use tax software to file your taxes yourself, the program will ask you if you have an IP PIN and prompt you to enter it in the appropriate place. If multiple people on a report have an IP PIN, each person must enter it correctly to submit the report.

If you use a tax professional, please review your return and verify its accuracy before submitting your IP PIN. Some identity thieves pose as tax preparers to steal your information. The easiest way to avoid this is to verify your return before submitting it. And be careful not to give your IP PIN to anyone other than your tax preparer.

If you have questions about your IP PIN, you can refer to the IRS’ FAQs or contact the IRS for more information.

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