IRS Plans Broader Use of IP PINs in Battle Against Identity Theft

Wednesday, September 03, 2014 12:29 PM | NCSA Website Manager (Administrator)

The IRS plans to increase marketing of its test program to let more people get identity protection personal identification numbers (IP PINs) for filing their returns.

Amy Stanton, the Internal Revenue Service's director of privacy and information protection, said the goal of IRS's pilot program is to make the six-digit IP PINs available not only to those who have been victims of theft, but to anyone who wants oneundefinedbefore they become victims. Speaking at a recent IRS Nationwide Tax Forum, she noted the pilot is available to residents of Florida, Georgia and the District of Columbia who are already going online for PINs for electronic filing. The IRS plans to do more marketing of the program in these jurisdictions in coming months, but it isn't yet clear how or when it might be expanded to other states.

In 2014, the IRS is sending victims of theft a single notice with the new PIN, which they can use for this year's return and any delinquent returns filed this year. The IRS will send the taxpayer a new PIN next year, Stanton said.

Another key facet of the IRS's strategy to prevent ID theft is e-authentication, according to Stanton. This is a two-step process in which taxpayers have to first provide tax-related information and then provide personal information that only they would know, such as information about a loan or a mortgage. She emphasized that taxpayers must have e-mail addresses so the IRS can send them a code needed to set up their accounts.

Stanton provided information on what taxpayers should do in the case of business identity theft: report the development to law enforcement; notify credit bureaus, banks, credit card companies and other creditors; and respond immediately to any IRS communications. "The worst thing you can do is nothing," she said.

Stanton urged practitioners to consider Social Security numbers and other personal financial information as commodities to be protected, noting that the IRS is working hard to "mask" Social Security numbers on its notices, letters and other communications with taxpayers. "Social Security numbers are bought and sold all the time," she said.

Stanton concluded her remarks by stating that identity theft is "one of the most critical issues facing the IRS. It's an issue that belongs to all of us, and it's not something the IRS can tackle alone," Stanton said, adding that the agency views the issue as "a call to action."

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