One thing that has become far more common over the last several years is tax-related identity theft, and unfortunately many people do not realize how serious it can become until it happens to them personally. We have seen situations where someone goes to file their tax return only to discover the IRS has already received a return under their Social Security number from a completely different person trying to steal a refund. Once that happens, it can create months of frustration, delays, paperwork, and communication with the IRS to get everything corrected. After more than 20 years working with taxpayers, one thing I can say with certainty is that preventing identity theft is far easier than fixing it afterward.

That is one reason why the IRS Identity Protection PIN Program has become such an important tool for many taxpayers today. The IRS Identity Protection PIN, commonly called an IP PIN, is a six-digit number assigned specifically to you by the IRS to help confirm your identity when your federal tax return is filed. Once you are enrolled in the program, your return generally cannot be electronically filed without that correct PIN number attached to it. Even if a scammer somehow gets access to your Social Security number and personal information, they would still have difficulty filing a fraudulent tax return without also having your IRS-issued PIN.

In many ways, it works similarly to two-factor authentication that people now use for banking and online accounts. The IRS originally created the program primarily for confirmed victims of tax identity theft, but over time they expanded it so that most taxpayers can voluntarily enroll if they want the additional protection. Personally, I think more people should seriously consider using it. We live in a time where data breaches have become incredibly common. Large corporations, medical systems, financial institutions, and online services have all experienced security breaches over the years, and millions of Social Security numbers are already circulating online without people even realizing it.

The reality is that your personal information may already be exposed somewhere, even if you have never directly experienced identity theft yourself. The good news is that the IRS has made the enrollment process much easier than it used to be. Taxpayers can typically obtain their IP PIN through their IRS online account after completing identity verification steps. Once enrolled, the IRS issues a new six-digit PIN every year. It is important to keep that number in a safe place because forgetting or losing it during tax season can delay the filing process.

We always recommend clients save both a physical and digital copy somewhere secure and provide the number to their tax preparer early so there are no delays when it comes time to file. One misconception people sometimes have is that using the IP PIN program somehow increases the chance of being audited, but that is simply not true. The program is purely a security measure designed to protect taxpayers from fraudulent filings. It does not create additional IRS scrutiny or increase audit risk in any way.

Another important thing people should understand is that the IP PIN specifically protects against fraudulent federal tax return filings. It does not stop every type of identity theft such as credit fraud or banking fraud, but it does add a very strong layer of protection around your tax filings, which is where many scammers attempt to exploit stolen information. Over the years we have worked with taxpayers who spent countless hours trying to repair the damage caused by fraudulent tax filings, delayed refunds, and identity verification issues with the IRS. Compared to that process, taking a little time upfront to enroll in the Identity Protection PIN program is often well worth it.

In today’s environment, being proactive with your financial and tax security is simply the smarter approach. At TaxPointe, we regularly help individuals, families, retirees, and business owners navigate IRS issues, identity protection concerns, tax planning, and tax filing matters. In my experience, the clients who take preventative measures early almost always save themselves a tremendous amount of stress later on, and the IRS IP PIN program is one of those preventative tools that truly can make a difference.