Each year in the United States, hundreds of thousands of individuals become victims of identity theft. In fact, in 2022, the Federal Trade Commission received over 1.1 million reports of identity theft. For the same year, taxpayers filed over 228,000 Forms 14039, Identity Theft Affidavit, claiming they were experiencing tax-related identity theft, which occurs when a bad actor intentionally steals a taxpayer or dependent’s personal information without their knowledge or consent and uses it to file a fraudulent tax return.

What is the IP PIN Program?

An Identity Protection PIN (IP PIN) is a unique six-digit number known only to the taxpayer and the IRS; it helps prevent the misuse of the taxpayer’s Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) on fraudulent federal income tax returns. In calendar year 2022, about 525,000 taxpayers opted in to the IRS’s IP PIN program.

Once the IRS sends the taxpayer an IP PIN, the taxpayer must include it when filing any federal income tax returns during the year, including late filed prior year and subsequent amended returns. The IP PIN is only valid for one year, and the IRS sends a new IP PIN to taxpayers in the program annually. From mid-December through early January, the IRS sends CP01A notices to taxpayers who requested an IP PIN on Form 15227, Application for an Identity Protection Personal Identification Number (IP PIN), visited a Taxpayer Assistance Center in person, or are a confirmed victim of tax-related identity theft and the IRS has resolved all tax account issues. If a taxpayer opted in online to get an IP PIN or retrieved their IP PIN online, they will not receive a CP01A notice; instead, they must retrieve their new IP PIN online each year before filing their return.

When the taxpayer files their return, they include their IRS-provided IP PIN, signaling to the IRS that the return is authentic. If a taxpayer has an IP PIN but does not include it on their return at filing, this signals to the IRS that the return may be fraudulent. Taxpayers who are victims of tax-related identity theft are automatically entered into this program while taxpayers who want to protect themselves from future identity theft can voluntarily opt in.

Taxpayers who want to opt into the IP PIN program voluntarily can apply by:

• Signing in or creating an account on IRS Get an IP PIN online;
• Visiting a Taxpayer Assistance Center (TAC) in person (be sure to schedule an appointment before your visit); or
• Mailing a printed and completed Form 15227.

It is fastest to get an IP PIN online or in person; however, the online method requires an authentication process that some taxpayers might find burdensome, and the in-person method requires traveling to a TAC as well as waiting for the mailed IP PIN. This leads many taxpayers to submit their request through the mail. The IRS is currently behind in processing these forms.

IP PIN for Spouses and Dependents

Anyone who has an SSN or ITIN and can verify their identity is eligible to enroll in the IP PIN program. Every taxpayer who receives an IP PIN must enter it on their tax return before filing. This includes the primary taxpayer, spouse, and dependent if they have IP PINs. If only one taxpayer receives an IP PIN, enter it with that taxpayer’s SSN or ITIN. If both taxpayers receive an IP PIN, both taxpayers must enter the IP PIN with their SSNs or ITINs. When a dependent receives an IP PIN, the IRS requires the taxpayer to enter it on an electronically filed tax return along with Form 2441, Child and Dependent Care Expenses, and Schedule EIC, Earned Income Credit, as applicable.

The IRS is Behind in Processing Forms 15227

Processing times have increased for mailed IP PIN applications. The IRS currently aims to process these requests within 120 days of receipt; however, in fiscal year 2023, 60 percent of IP PIN applications took longer than 120 days, increasing taxpayer anxiety. This increase in processing time largely corresponds with the increase in Identity Theft Victim Assistance case receipts. Thus, if taxpayers request an IP PIN through the mail, they should expect possible delays in receiving their IP PIN. To reduce this processing time, the IRS should consider providing taxpayers with a fillable electronic Form 15227. Although taxpayers using this method would not receive an IP PIN instantaneously as they would if they used the online application, the electronic form would bypass the delays associated with mailing and processing paper forms.

Remember to use you IP PIN when filing your Federal Income Tax Return

If taxpayers don’t include their IP PIN on their federal income tax return, the IRS will reject the return if filed electronically or delay processing if filed by paper. One of the most common reasons for rejection of electronically filed returns is an invalid IP PIN. (See National Taxpayer Advocate 2023 Annual Report to Congress: Most Serious Problem: Processing.) To avoid having the IRS reject a return, the taxpayer will need to get a new IP PIN each year prior to filing their federal income tax return.

What to do if you lose your IP PIN

If you lost your IP PIN or you never received a CP01A notice issuing the IP PIN, do not file for a new IP PIN. Instead, you need to retrieve your IP PIN by either going online or calling the IRS’s Identity Protection Specialized Unit. If you go online, you will need to create an online account (if you don’t already have one) and authenticate your identity. If you are unable to use the online option, call 800-908-4490 (callers outside the United States can use 267-941-1000). Be aware that having the IRS issue a new IP PIN via Letter 4869C can take up to 21 days. If that timeframe overlaps with the filing season deadline (typically April 15), you’ll need to file for an extension or file a paper return. But remember – if you file a paper return without your IP PIN, it will take the IRS longer to validate your information and process the return.

How the IRS can improve the IP PIN Program

The IP PIN program is underutilized. The IRS should expand its outreach efforts, ensuring that financial institutions, local law enforcement, and state taxing authorities know of the IRS’s IP PIN program and can inform individuals how to access it. For example, if taxpayers have been victims of financial identity theft, such as finding irregular charges to their bank accounts, their bank should be aware of the IP PIN program and could inform them about how to get an IP PIN to prevent tax-related identity theft. Once informed, taxpayers can visit the IRS website and request an IP PIN as an added precaution. This type of collaboration with private-public stakeholders will expand awareness of this effective identity theft protection tool.

Conclusion

The IP PIN program is an important tool that taxpayers can use to protect themselves from future tax-related identity theft. Once taxpayers are enrolled in the program, there are a few important things they need to remember when filing their returns. Most notably, they must enter the IP PIN on any federal income tax return filed during the year including prior year returns. When taxpayers don’t receive an updated IP PIN or they can’t locate it, the IRS has procedures in place for retrieving their new number. Although there are a few extra hoops for taxpayers to jump through when they have an IP PIN, it offers an extra layer of protection from tax-related identity theft, and the IRS should take steps to improve this program and ensure it is more widely known to the public. Taxpayers should consider requesting an IP PIN.

Recommendations

The National Taxpayer Advocate recommends that the IRS:

• Provide a process by which taxpayers can electronically submit Form 15227 and ensure the process routes the forms to the appropriate unit within 48 hours of receipt;
• Conduct outreach to private-public stakeholders providing awareness of the availability of IP PINs and how taxpayers can request them; and
• Provide taxpayers who voluntarily opt into the IP PIN program a means by which they can opt out of the program.

Helpful Tips

• The IRS has a toll-free number for identity theft victims (800-908-4490), including those who have misplaced their IP PIN or never received their annually updated IP PIN number. International callers should call 267-941-1000.
• Taxpayers and others can learn more about the IP PIN program at the IRS’s FAQ site.