Identity theft has fast become the biggest type of tax refund fraud for both the IRS and States. As tax identity theft has rapidly grown over the past few years, the IRS and States are devoting more resources to combating it and in educating taxpayers about how to secure their personal information and what to do if they become a victim of identity theft.
This page is designed to give you the latest information on what tax identity theft is and how it can affect an individual’s federal and state return, the latest ways identity thieves are trying to obtain the personal information of individuals, what the IRS Identity Protection PIN is and how it is assigned to an individual, and links that will give you additional information on how to protect yourself from becoming a victim of identity theft.
The following topics are covered:
Ways Identity Thieves are Attempting to Obtain Personal Information
What the IRS is doing to Help Prevent Tax Identity Theft
What States are doing to Help Prevent Tax Identity Theft
IRS Security Summit – IRS, States and Industry Partners Collaborative Effort in Tax Related Identity Theft
What an Individual needs to do if they become a Victim of Identity Theft
Identity Protection PIN
Additional Links for More Information on Identity Theft
Ways Identity Thieves are attempting to Obtain Personal Information
Cybercriminals are getting more creative in their efforts to obtain an individual’s personal information in order to commit tax identity theft from the IRS. Be on the lookout for the following scams:
Steps IRS is Taking to Prevent Tax Identity Theft
Here are examples of some of the steps the IRS is taking to help fight tax identity theft:
Steps States are taking to Prevent Tax Identity Theft
Identity thieves are also using an individual’s stolen personal information to file false state income tax returns in both the individual’s resident state and other states that have a state income tax.
Below are examples of some of the steps that States are taking to help fight tax identity theft:
IRS Security Summit – IRS, States and Industry Partners Collaborative Effort to Fight Tax Identity Theft
IRS Commissioner John Koskinen convened a Security Summit in March 2015. The Summit’s goal is for representatives from the IRS, State, Tax Software Industry, and Financial Institutions to work together to discuss common challenges and methods to combat tax-related identity theft.
Some of the Security Summit initiatives that were used during the 2016 filing season were:
For the upcoming 2017 filing season, the Security Summit initiatives that will be put in place, like those before it, generally will be invisible to taxpayers. These initiatives will include:
For more information on the Security Summit and what changes were put in place for the 2016 filing season and what additional changes will be implemented for the 2017 filing season, see the following webpages:
What Procedures Should Individuals Follow Who Have Been Victims of Identity Theft to Protect their Federal Tax Return
If a taxpayer informs a tax preparer that they have been a victim of identity theft and they have not contacted the IRS about it, the tax preparer should have the taxpayer contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. Once the taxpayer has contacted the unit, they will be asked to complete Form 14039 and mail it to the address provided on the form. This will start the process of the IRS marking their account and issuing an Identity Protection PIN.
Identity Protection PIN (IP PIN) and how it is used on the Federal Tax Return
The IP PIN is a six-digit number that is assigned to taxpayers that have confirmed with the IRS that they are victims of identity theft. The individual will then include the IP PIN on their federal income tax return which will verify to the IRS the taxpayer’s identity and allow their return to be processed in a normal manner. The IP PIN will also prevent someone else from filing a return with their Social Security Number as the primary or secondary taxpayer.
Things to Know about the IRS IP PIN program:
For more information on the IP PIN see the following pages on the IRS website:
Expired Individual Federal Tax Provisions
May 10, 2017
Reminder to Watch for Phishing Email Schemes
March 22, 2017
IRS Identity Verification Letters
March 1, 2017
Additional Reminders for this Filing Season
February 16, 2017
Useful IRS Webpages
February 1, 2017
Reminder of the Federal Refund Delays and Expansion of Preparer Due Diligence Requirements
January 11, 2017
Expiring ITINs and Tax Scams Aimed at Tax Preparers
January 6, 2017
Affordable Care Act Reminders for Tax Year 2016 Returns
December 13, 2016