For all of us procrastinating about filing our federal income tax returns it is important to remember that 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. The IRS’s Taxpayer Advocate Service recently disclosed that victims of income tax identity theft wait an average of 675 days for the IRS to process their legitimate tax return and get their tax refund.

So what can you do to protect yourself from income tax identity theft?  First and foremost you should file your return as soon as possible because if you file your income tax return before the identity thief does you should be able to get your refund in a timely manner.  However, income tax identity thieves are pretty prompt in filing their phony returns so you should also get a PIN from the IRS to use when filing your tax return.

In 2022 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 but will automatically be renewed each year.  The easiest way to get a PIN is through your online IRS account.  Here is a link to information about getting an online IRS Account. https://www.irs.gov/payments/online-account-for-individuals

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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