If you have been the victim of tax-related identity theft, you are probably familiar with the IPPIN, otherwise known as an Identity Protection PIN. This is a one-use only PIN issued by the IRS that must be used to e-file a tax return. This extra layer of security is a step the IRS is taking to stop tax-related identity theft and refund fraud.
The IPPIN is a six-digit number that must be entered on the tax return in order to implement e-filing for that particular year. To this point, these IPPINs have only been issued to victims of tax-related identity theft. However, the IRS is embarking on a pilot program to beef up the security provided by the IPPIN. Taxpayers in Florida, Georgia, and the District of Columbia may request and IPPIN from the IRS even if they are not identity-theft victims. These three were chosen due to the high incidence of identity theft that is occurring in these locations.
Once you opt in to the IPPIN program you cannot opt out, and a new IPPIN will be sent to you at the beginning of each year. Before opting in, weigh the pros and cons of being a part of the program. You will have a higher level of protection, but you must be vigilant about keeping up with the number. If the number is lost, you must notify the IRS and get a new one. Hopefully, the IRS will provide a way to opt out in the future
If you want to obtain an IPPIN, go to https://www.irs.gov/Individuals/Get-An-Identity-Protection-PIN, where you can register and create an account. Once obtained, the IPPIN must be used to confirm your identity on all federal tax returns filed during the calendar year. You can learn more about the IPPIN program at https://www.irs.gov/Individuals/Frequently-Asked-Questions-about-the-Identity-Protection-Personal-Identification-Number-(IP-PIN). Reportedly, an IPPIN may be obtained immediately.
If this pilot program is successful, we can look for the IRS to open it up to residents of all states. The IRS is taking several new steps this year to help combat tax-related identity theft. In my opinion, they were somewhat late in getting on top of this, so they are playing catch up. Hopefully this and other steps being taken by the IRS will help reduce this plague that is upon us.
Dr. John Stancil (My Bald CPA) is Professor Emeritus of Accounting and Tax at Florida Southern College in Lakeland, FL. He is a CPA, CMA, and CFM and passed all exams on the first attempt. He holds a DBA from the University of Memphis and the MBA from the University of Georgia. He has maintained a CPA practice since 1979 with an emphasis in taxation. His areas of expertise include church and clergy tax issues and the foreign earned income credit. He prepares all types of returns, individual and business.
Dr. Stancil has written for the Polk County Business Journal and has presented a number of papers at academic conferences. He wrote the Instructor’s Manual for the 13th edition of Horngren’s Cost Accounting. He is published in the Global Sustainability as a Business Imperative, Green Issues and Debates, The Encyclopedia of Business in Today’s World, The Palmetto Business Review, The CPA Journal, and in the NATP TaxPro Journal. His paper, “Building Sustainability into the Tax Code” was recognized as the outstanding accounting paper at the annual meeting of the South East InfORMS. He wrote a book entitled “Tax Issues Faced by U. S. Missionary Personnel Abroad ” that will soon be published.
He has recently launched a new endeavor, Church Tax Solutions, which presents online, on demand seminars on various church and clergy tax issues.
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