Identity Protection PIN

The Identity Protection PIN (IP PIN) is a six (6) digit number assigned to eligible taxpayers by the IRS. This is done to help prevent the misuse of the Social Security Number (SSN) on fraudulent federal income tax returns. It helps the IRS to authenticate identity and accept an electronic or paper tax return. IP PIN prevents an identity theft occurring from a stolen SSN.

The Internal Revenue Service (IRS) issues IP PIN’s to confirmed identity theft victims once their case is resolved. However, starting this year, any taxpayer who wants an IP PIN, even those who were not a victim of theft, can obtain one. To learn more about IP PINs, continue reading!

Who Will Receive an IP PIN from the IRS?

• You received an IP PIN last year; or
• You received a CP01A notice; ¹ or
• Opted to receive an IP PIN.
  

Reporting Your IP PIN on Your Tax Returns:

Where you enter the IP PIN depends on the method you use to file your return: electronic or paper.

Electronic Returns:

• Every taxpayer who has received the IP PIN must enter this on the return (i.e, you, your spouse, and dependents);
• In case only one of you received the IP PIN, enter this with that person’s SSN.

Paper Returns:

• If you choose to paper file, both you and your spouse must enter it on the return;
• Enter the IP PIN(s) as applicable in the boxes marked “Identity Protection Pin” in signature are of the return.

How Can You Voluntarily Opt-in for the IP PIN Program?

Starting 2021, the IRS has expanded its scope to allow taxpayers to opt-in voluntarily for receiving the IP PIN ². You can now protect yourself from any tax related identity theft. So, to receive an IP PIN:

• Go to IRS.gov/IPPIN, select the Get an IP PIN tool, verify your identity and create an account;
• Once you have a username, password and security code, enter the Get an IP PIN tool;
• Your IP PIN will be revealed to you.

The IRS will mail the new IP PINs each year to all taxpayers registered for this program.  

Failing to Report Your IP PIN

Finally, let's see what happens when you do not report the IP PIN on your tax returns.

Correct IP PIN’s must be entered on electronic and paper tax returns to avoid rejections or delays in processing. The IRS will reject your electronic return and you won’t be able to e-file them. With paper returns, this will go through multiple screenings and may delay your return processing and issue of the refunds you may be due.

We hope this article will help you to use your IP PIN correctly. Before we wrap up, here are few quick points to keep in mind:⁴

• Each year a new IP PIN is issued. You cannot use your last year’s IP PIN on this years tax return;
• IP PIN is used only on Forms 1040, 1040-PR and 1040-SS;
• Do not share your IP PIN with anyone other than your tax preparer;
• The IRS will never mail, text or call to request the IP PIN from you. Be aware to protect your PINs from theft and scams;
• Generally, IP PIN notices are issued from mid-December through January;
• IP PINs are valid only for federal income tax returns. If your state issues PINs, use them for only state income tax returns. Federal and state PINs are different.

If you have any questions or need help with tax filing, feel free to contact us as we have professionals with extensive Australian, US and Dutch tax experience. Send us a message on Facebook, or fill out our contact form if you would like us to get in touch.