Unfortunately, the incidence of identity theft continues to rise, fueled by increasing numbers of data breaches and sophisticated cybercrime techniques. Tax-related identity theft occurs when unauthorized persons either impersonate the taxpayer or the IRS to obtain personal information or claim fraudulent refunds. Client data security is of the utmost importance to us, so we have provided some advice for preventing tax-related identity theft and the financial havoc that may ensue should your personal information be harvested by criminals.
Beware of Suspicious E-mails and Telephone Calls
The IRS and other taxing agencies will send important notices about changes to your tax liabilities via mail almost exclusively. Cyber criminals often contact taxpayers via e-mail or phone, purporting to be IRS representatives. They will request personal information or threaten dire consequences unless a supposed tax bill is paid immediately. This is a scam known as “phishing.” The IRS will never initiate contact with you via e-mail or phone to request personal information. Never provide personal information (including your PIN) over the phone or via e-mail. If you receive any sort of communication from an individual or organization posing as a taxing authority, we urge you to contact us immediately so that we can assist you in verifying the authenticity of the communication.
IRS Response to Identity Theft
The IRS is fully aware of the recent uptick in tax-related identity theft. To prevent and combat these crimes, the IRS encourages taxpayers to report any unusual activity.
Report suspicious e-mail phishing scams to phishing@irs.gov. To report phishing scams by phone, fax, or mail, call 1-800-366-4484. Report IRS impersonation scams to the Treasury Inspector General for Tax Administration’s IRS Impersonation Scams Reporting.
To protect taxpayers, the IRS has also given each taxpayer the option to secure their information with an Identity Protection Personal Identification Number (IP PIN). An IP PIN is a six-digit PIN assigned by the IRS that changes annually. This is a form of two-factor authorization and can help ensure that a scammer cannot file your returns fraudulently.
If you have applied for an IP PIN, or if the IRS has assigned you one, it will be required for electronically filing your return. If it is not included or is incorrect, the return will be rejected by the IRS if it is e-filed.
If a return is paper filed, the IP PIN is still required. If it is not included, the return will undergo additional verification by the IRS, which may cause delays in processing.
IP PINs are assigned by the IRS for the calendar year, regardless of which tax year return is being filed. For example, if an IP PIN is assigned for 2025, it must be used whether the 2021, 2022, 2023, or 2024 returns are being filed in 2025.
To reduce the risk of tax-related identity theft, we also recommend changing your Delivery Format of Notices and Letters in your Online profile to prevent a criminal from intercepting your mail and retrieving your IP PIN.
Apply for an IRS IP PIN
Apply for an IRS IP PIN here.
Please note that you will need to establish an “ID.me” account to verify your identity before applying for an IP PIN. In order to establish your ID.me account, you will need your cell phone and driver’s license ready as the process does involve taking a picture of yourself to match your official identification card. Once your identity has been validated, your picture will be deleted from the system.
Once you have established your ID.me account and have logged into the IRS portal, follow the prompts to apply for your IP PIN. The IP PIN will also be visible on the bottom of your Profile page here.
If you receive an IP PIN, please be sure to share it with your contact at Realize; we will need it to file your returns.
Additional Steps for Avoiding Identity Theft
We have also provided some IRS-recommended guidelines if you believe you are the victim of identity theft.
Your team at Realize CPA is here to protect your private information by proactively preventing tax-related identity theft. If you have any questions about securing your account or applying for an IRS IP PIN, please feel free to contact us. We are happy to help secure your data – and your peace of mind.
