An IRS IP PIN is the only sure way to stop tax return theft from happening to you. Below we share six excellent reasons to get one, and show you how.
Tax refund theft will steal an estimated $21 billion in 2016, causing massive hassles and headaches for millions of taxpayers who must then prove their identity to the IRS. Anyone can be hit by this easy-to-do crime, and an IRS IP PIN is the only way to prevent it from happening. Anyone can get an IRS IP PIN and filing is easy, but those who wait may be too late.
1. Tax Refund Theft is Skyrocketing
Tax refund theft is the IRS’s #1 scam for 2014, victimizing millions of Americans. Incidents of the crime went up 66% from 2012 to 2013, resulting in more than $5 billion in stolen tax refunds. By 2016 it’s expected to hit $21 billion.
The crime has become so popular and easy that inner city police departments have reported that drug dealers and other organized criminals who once relied on violent crime are switching to it to make a living.
2. Anyone Can Be Hit by Tax Refund Theft
Related: Tax Return Theft Skyrocketing: Don’t Be a Victim
2. An IRS IP PIN is the Only Way to Stop Tax Refund Theft
An IRS IP PIN isn’t the same thing as an e-file PIN. An IP PIN adds a layer of protection to a taxpayer’s IRS account. An IP PIN is just an additional number the IRS can add to a taxpayer’s account. When someone gets an IP PIN, the IRS requires them to submit the PIN with their return from then on. Any tax return submitted in that person’s name without the PIN will be rejected.
If a tax return thief tries to submit a fake return for someone who has an IP PIN, the IRS will reject the return. Since it’s common for people to share their social security numbers with businesses and organizations but not to share their PINs, it’s very difficult for thieves to get them. The IRS expects to issue 1.2 million IP PINs in 2014.
While taxpayers can also decrease their risk of being victimized by tax refund theft by filing early, filing early doesn’t offer 100% protection from the crime.
3. The IRS Claims IP PINs Are Only For Fraud Victims But…
Anyone can get an IRS IP PIN.
The IRS Identity Protection Web Page states that IP PINs are only for people who’ve already been victimized by tax refund theft or have been specifically invited by the IRS. However, any taxpayer can get invited. All it takes is filling out IRS Form 14039 – the Identity Theft Affidavit. The form says it’s for identity theft victims or “potential” victims. A call to the IRS will verify that a potential victim is defined as anyone whose social security number may possibly be stolen. Since who has ever shared their social security number with a bank, credit card company, hospital or even the IRS falls into this category, everyone can file the form.
While this may seem like cheating, the IRS actually wants people to apply for PIN numbers. It’s the only way they have to fight an estimated $21 billion in losses and even more from lost employee time in 2016.
4. IRS IP PINs Aren’t Available After January 1st
5. It’s Easy to Get an IRS IP Pin
Filing IRS Form 14039 is easy. It only requires entering the taxpayer’s personal info and mailing it in.
Those who haven’t already been victimized by tax return theft should check box two. Box two is for those who “have experienced an event that could lead to identity theft.” Since even IRS employees can steal social security numbers, even submitting a tax return to the IRS is an event that could lead to identity theft. This may seem like a joke, but a call to the IRS will verify it.
Taxpayers then enter their name, address and telephone number on the form. They must also submit a photocopy of a driver’s license, passport, social security card or other identifying document. The only other steps are signing the form and mailing it to the address listed at the form’s bottom.
Married couples who file jointly only need to file for one IP PIN. When filing, the spouse who filed for the IP PIN will need to enter their name and social security number first on all future tax returns.
Related: How to Stop Identity Theft With a Fraud Alert
6. An IRS IP PIN Doesn’t Make Filing Any Harder
One Reason Not to Get an IRS IP PIN
The benefits of being protected from tax refund theft outweigh the risks of losing the PIN. Some taxpayers keep their IP PINs in home safes. Others keep them written in a safe place in the house or stored in a laptop file. While there’s no guarantee an IP PIN won’t also be stolen, tax refund thieves are generally looking for the easy money that comes from taxpayers who aren’t protected by an IP PIN, and there’s plenty of that around.
Related: Tax Return Theft Skyrocketing: Don’t Be a Victim
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