As 2024 winds down, it’s time to start thinking about the upcoming tax filing season. As part of that, the IRS announced this week that they are now encouraging all taxpayers to sign up for an IP PIN before the 2025 tax season, and the time to do it is now!
Press Release here: IRS encourages all taxpayers to sign up for an IP PIN for the 2025 tax season | Internal Revenue Service
What is an IP PIN?
IP PIN stands for Identity Protection Personal Identification Number. It’s effectively an additional layer of security that comes into play when filing your taxes. Previously these have been issued to victims of identity theft, but in recent years they have become a popular way to ensure you’re the only person who is filing your tax return.
If someone attempts to e-file a return without your IP PIN on it, it will be rejected. Your IP PIN will change every year, and you will need to login to the IRS website to get the new PIN each year. The net result of this is a little more work on your part to receive this PIN and provide it to your tax preparer (or fill it in with the online software if you’re filing on your own), but it helps prevent bad actors from filing a fraudulent return and claiming refunds before you’ve had a chance to file.
What if i get an IP PIN and then lose it, or lose access to my IRS account?
If you have signed up to receive an IP PIN, you’ll need the PIN to e-file. If you don’t have it or can’t get it, you will need to file on paper. This will go through extra scrutiny and security checks when being processed by the IRS to ensure it’s actually you filing it and not a bad actor.
Why is this changing now?
Basically more people are being impacted by tax-related identity theft. With as little as your name and Social Security Number, people can file a return on your behalf and have refunds mailed directly to them, before you’ve had a chance to file. Then when you file, your return gets rejected because it’s already been filed. You then need to spend your time and money working with the IRS to sort out what happened and get it fixed. The IRS certainly has safeguards in place to try and prevent these situations from happening, but nothing is fool-proof. And every week it seems like we hear word of a new data breach from some organization or another – every place in our lives where we can add another layer of security is certainly a good idea.
Can I change my mind after i sign up?
Previously, once you signed up for an IP PIN, you had to stay in the program for life – every tax return you’ll ever file going forward had to have the IP PIN on it. Now, they’ve added the ability to opt-out of the program via your IRS Online Account – but only if you opted in to the program. If you were placed into the program due to identity theft, you will need to remain in the program.
Alright, you’ve convinced me. How do i get an IP PIN?
All you have to do is create and sign in to an IRS Online Account here: Online account for individuals | Internal Revenue Service. If you don’t already have an account with ID.Me, you will be prompted to create one – there are several steps to validate your identity, so be ready for a bit of a process. Once it’s created, this will open up a few doors – including getting an IP PIN, making payments online, even viewing your IRS transcripts if you need to see what’s happened to your account in previous years. ID.Me gets used in a wide variety of ways as well – I used it this past summer to check in to a hotel even. Make sure you use a good password on this account, as you don’t want to let bad actors into your accounts. If you aren’t already using a password manager, I’d highly recommend 1Password.
If you’re going to do it, do it before November 23rd, 2024 to be prepared for the 2025 filing season. The IRS systems shut down for maintenance after November 23rd until mid-January to prepare for the new tax year. Sign up now, then you’ll be ready to log back in when things open back up in January.
If the online approach is not for you, there are other methods to obtain an IP PIN – you can learn more about all of the methods here: Get an identity protection PIN | Internal Revenue Service
What do I do with this IP PIN?
Keep it safe! Don’t share it with anyone until you’re ready to file your taxes. The IRS will never call, email, or text a request for your IP PIN. You may need it while interacting with the IRS, but they won’t call and ask you for it randomly. If you’re filing your own taxes, you’ll need to enter this toward the end of the process of filing, or write it into the appropriate spot on your paper-filed return. If you’re working with a tax pro, you will need to provide them with the PIN so they can enter it on your behalf into their software. If you’re working with a new or unfamiliar tax pro, I recommend holding on to the IP PIN until you’ve reviewed the return and are ready for them to actually file the return for you – if you find out during the process that you’re working with the wrong tax pro, keeping that number from them will prevent them from filing your return. Keep it safe until you know you’re ready to file.
Conclusion
With so many opportunities for fraud running rampant in our world today, putting one more lock on the path to your tax refund is a nice option to help keep you safe. If you have any questions about the tax process, don’t hesitate to reach out via our Contact Us page!
