IRS Mails Identity Theft PINs with Incorrect Tax Year

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With the unfortunate uptick in data breaches and identity theft crimes over the past several years, many businesses and organizations have taken steps to prevent or at least mitigate the potential impact of identity theft. For example, you’ve probably received replacement credit cards within the last few months; these cards contain a new chip that is designed to help keep your information more secure.

The IRS is no exception; if you have been a victim of identity theft, and reported the theft to the IRS, you will be issued an Identity Protection Personal Identity Number, also known as an IP PIN. Here’s how it works: the IP PIN is a six digit number that must be included with the taxpayer’s return in order for the IRS to verify their identity. Whether the return is e-filed or paper filed, if the IP PIN is not transmitted with the taxpayer’s return, the IRS systems will delay processing until the return can be thoroughly examined, and the identity of the taxpayer confirmed.

In December of 2015, the IRS began mailing letters containing the IP PINs to be used when filing 2015 tax returns. These letters are known specifically as CP01A notices, and are sent only to taxpayers who have been identified as being victims of identity theft. Unfortunately, every one of these notices mailed in December indicates the wrong tax year for which the IP PIN is to be used. Rather than stating that the number should be used for 2015 tax returns, the notices all state that the IP PIN is to be used when filing the taxpayer’s 2014 tax return.

Naturally, much confusion has ensued. In the wake of the gaffe, the IRS has issued a statement explaining the error and emphasizing that these IP PINs are in fact to be used when filing 2015 tax returns. Additionally, the Service apologizes for any confusion or inconvenience.

Click here to read the full IRS statement, and to learn all the details about the IP PIN system. Finally, as we kick off this year’s filing season, remember to keep an eye on your bank and credit card activity, credit score, and tax records, as well as storing your personal information in secure files, whether physical or digital. The recent wave of identity theft shows no signs of slowing down, and as the saying goes, the best offense is a good defense.

By Austin Bradley, CPA