Income tax identity theft, by which identity thieves file phony income tax returns with counterfeit W-2s using the Social Security number and name of their victim is still a major problem for the IRS and taxpayers costing us all billions of dollars each year.  However, when someone has stolen your Social Security number and filed an income tax return using your name, the problem becomes particularly personal.  When you are a victim of income tax identity theft it can take many months to straighten out the matter with the IRS and receive your income tax refund.  The IRS is expected to announce that it will start accepting electronically filed income tax returns on January 23rd. Taxpayers should be thinking of filing their income tax returns as soon as possible because the best way to prevent becoming a victim of income tax identity theft is to file your income tax return before an identity thief does so using your name.

Last year the IRS announced an expansion of its Identity Protection PIN Op-In Program that provides individual taxpayers with a six-digit code that is required to be included on the individual’s income tax return.  This will protect someone whose Social Security number had been compromised from becoming a victim of identity theft because the identity thief will not know the six-digit code. Here is a link to the section of the IRS’ website where you can apply for a PIN.  https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin The PIN is only valid for a single year and must be applied for anew each year.    The process will require you to verify your identity.  Victims of income tax identity theft who have filed an identity theft affidavit with the IRS automatically receive an IP PIN by regular mail from the IRS.

TIPS

In addition to protecting the privacy of your Social Security number, the best thing you can do to protect yourself from becoming a victim of income tax identity theft is to file your income tax return as early as possible.  A criminal can successfully make you a victim of income tax identity theft only if he or she files an income tax return using your Social Security number before you file your legitimate income tax return.  Therefore the earlier you file your income tax return, the more likely you are to avoid becoming a victim of this crime.

The IRS started the Identity Theft Protection PIN program almost ten years ago, but it was only available to people who were already victims of identity theft and to people living in a few specific states chosen by the IRS to test the program.  Now anyone can and should obtain an Identity Theft Protection PIN.

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