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Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance.

How to Protect Yourself Against Tax Identity Fraud with Help from the IRS

How to Protect Yourself Against Tax Identity Fraud with Help from the IRS

By Britt Erica Tunick

Anyone able to prove their identity now has the ability to further protect themselves from identity theft and tax fraud, thanks to recent efforts by the Internal Revenue Service (IRS).

Since the onset of COVID-19, instances of identity theft have soared, fueled by criminals’ efforts to get their hands on the more than $2 trillion in aid that the government has so far provided to individuals and small businesses through the Coronavirus Aid, Relief and Economic Security (CARES) Act in the form of enhanced unemployment benefits, stimulus checks, and Paycheck Protection Program loans. According to the Federal Trade Commission, 4.8 million cases of identity theft or fraud were reported in 2020, a 45% rise from the 3.3 million cases reported in 2019.

One popular form of fraud is tax identity fraud, where criminals who have somehow obtained an individual’s social security number file a fraudulent tax return on that person’s behalf in order to steal their tax refund. To help stave off this type of fraud, the IRS recently expanded its Identity Protection PIN Opt-In Program to all taxpayers, so long as they are able to verify their identity. Starting this year, taxpayers can voluntarily opt in to the program to obtain a unique, six-digit Identity Protection PIN code that must be provided when they electronically file their tax return. Electronic tax returns submitted without the IP PIN will be rejected, while paper returns submitted without it will be subject to additional verification steps and reviewed more closely for fraud.

Anyone interested in obtaining an IP PIN for 2021 can do so through the following link: IRS.gov/IPPIN. If you do not yet have an IRS account, you will need to first go through the IRS’s Secure Access authentication process in order to take part in the program. Go to the following link to access the information necessary for this verification: IRS.gov/SecureAccess.

The IRS’s IP PIN numbers are valid for one calendar year.