Every day an estimated 2,328 cyber crimes are committed. People who are actively looking for ways to exploit weaknesses in your system in order to obtain you, or your client’s, personal information. As a tax professional you own and operate your own small business that handles the most sensitive information a person can provide. Yet 51% of small businesses say they don’t allocate any budget to cyber security. Protecting the information your taxpayers provide you should be the top priority of any tax professionals and one of the best ways to do that is by recommending and helping your clients obtain their own Identity Protection PINs from the IRS.
What is an Identity Protection PIN (IP PIN)?
IP PIN is a six digit number assigned to a taxpayer which acts as an extra layer of protection from identity thieves attempting to file fraudulent tax returns using your personal data. The number is used to verify the taxpayers identity to the IRS whenever they file electronic or paper tax returns. In the past Identity Protection PINs were assigned to an individual who was already a victim of identity theft, however, anyone can obtain an IP PIN from the IRS upon request and identity verification.
What You Should Know
When the IP PIN is assigned the only two people who know about it are the IRS and the taxpayer who requested it. If the taxpayer is using a tax preparation service then they will need to share the IP PIN with their trusted tax professional. We recommend that tax pros don’t store the IP PIN digitally, either on their devices or their tax software, as it will prevent it from being stolen or lost during a system failure or cyber attack. The six digit IP PIN is only valid for one calendar year and a new one is generated for the taxpayer each year. Finally, you as the tax professional cannot obtain the identity protection PIN on behalf of your client but could offer to assist them as an additional service.
How to Obtain an IP PIN?
Identity protection PINs must be obtained through the IRS. The taxpayer will need to create or have access to an ID.me account on the IRS website. More information and a link to the site for obtaining an IP PIN is available below.
However, if the taxpayer is unable to validate their identity online but their yearly income is below $73,000 ($146,000 if married), they can still apply for the IP PIN by filling out Form 15227. The IRS will then call the number listed on the form in order to validate the identity of the taxpayer and assign them their IP PIN. If neither of the listed options are available to your taxpayer they always have the option to visit their local Taxpayer Assistance Center with identifying documents in order to verify their identity and receive an IP PIN. Taxpayers will receive their IP PINs in the mail around four to six weeks after identity verification.
Identity theft is not a joke, millions suffer every year because of this crime. As a tax professional you are in a unique position to help protect your clients by providing resources and information to them on the best ways to protect their personal information as well as additional steps they can take to prevent thieves from using their information once obtained. You can also open up an additional revenue stream by providing these protection services at a cost to your clients.
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