January 18, 2016

Identity Protection

Contributor Michael Novak, Partner, Tax & Business Services

Identity Protection

As we have reported in previous Marcum Tax Flashes, identity theft by tax scammers has become an increasing problem. In these schemes, scammers either trick individuals into making false tax payments, or steal social security numbers in order to file fraudulent returns.

The IRS has implemented a new program to combat this problem, utilizing a unique Identity Protection number, known as an IP PIN. This ID number is being provided to taxpayers who were previous targets of tax scammers. Taxpayers will use their specialized Identity Protection number when e-filing or paper filing tax returns to prevent the misuse of their social security numbers within fraudulent returns.

Persons eligible for this program include:

  • Victims of identity theft for which the IRS has a resolved case.
  • Residents of Florida, Georgia or the District of Columbia.
  • Persons receiving an opt-in letter from the IRS.

During December 2015 and January 2016, the IRS began issuing Notice CP01A by mail to eligible taxpayers. The notice reflects the Identity Protection Number, which is a 6 digit number.

Due to an IRS program error, some taxpayers may receive the Notice with tax year 2014 listed.  However, the Identity Protection number is actually to be utilized for filing 2015 tax returns. If a Notice dated 2014 is received by you, do not discard, but forward to your tax advisor.

Those who receive the Notice with the ID pin must use it to file all federal personal returns filed during the 2016 calendar year. If a return is e-filed with an incorrect social security number or missing Identity Protection number, the IRS system will reject the tax return.  This will delay the processing of your 2015 individual income tax return, even if it is paper filed.

If you received an Identity Protection Number, please forward a copy of the notice to your tax professional.

For additional information related to this topic, see:
https://www.irs.gov/Individuals/Get-An-Identity-Protection-PIN or