After Security Review, IRS Shuts Down Online IP PIN Tool
By Kelly Phillips Erb
It’s not getting any easier for taxpayers this season. The Internal Revenue Service (IRS) hasannounced that it has temporarily suspended the Identity Protection PIN (IP PIN) tool on the IRS website.
The website currently says:
The IP PIN tool is unavailable until further notice. The Internal Revenue Service is reviewing this tool and looking at further strengthening its security features. Taxpayers who have been issued an IP PIN through a CP01A Notice should continue to file their tax returns with an IP PIN as they normally would. Taxpayers who have lost their IP PINs and need to retrieve their numbers should follow these instructions. Taxpayers seeking to opt into the IP PIN program should file as they normally would, without an IP PIN.
At the start of the tax season, the IRS announced that it was ramping up the usage of IP PINs for taxpayers as part of its efforts to crack down on identity-related theft. An IP PIN is a unique 6 digit sequence that helps the IRS verify a taxpayer’s identity. When you have an IP PIN, it prevents someone else from filing a tax return with your Social Security Number (SSN) since returns which don’t include the correct IP PIN may be booted back. If a tax return is e-filed with your SSN but an incorrect or missing IP PIN, the IRS e-file system will reject the return until you submit the return with the correct IP PIN or you file a return on paper. If a tax return is filed on paper with your SSN but an incorrect or missing IP PIN, the IRS will delay processing the return – including any refund due – while they determine the validity of the return.
Not every taxpayer has an IP PIN. The IRS issued about 2.7 million IP PINs (sent using a CP01A letter) by mail for the current filing season (and some of those received IP PIN letters with the wrong date – oops!). Those IP PINs were issued to taxpayers participating in a pilot program as well as those who were the victims of non-tax identity theft. Most taxpayers who received their IP PIN via mail never used the online tool: those taxpayers should file their tax returns normally using the assigned IP PIN.
About 5% of taxpayers who received an IP PIN (approx. 130,000) used the online tool for a lost or forgotten IP PIN. The online tool allowed taxpayers to retrieve their PIN after answering “out of wallet” questions. For taxpayers who used this tool, the IRS says that it strengthened processes and filters in place to review those tax returns (this process was invisible to taxpayers). So far, the IRS claims those extra security measures helped stop 800 fraudulent returns filed using an IP PIN.
Apparently, something in the data suggests that there was a problem with the IP PIN tool. The IRS has not indicated what the problem might be (targeting of taxpayers, attempted breach, etc.) but said that it made the decision to shut down the feature “as part of its ongoing security review.” The IRS also said that it was “looking at further strengthening the security features on the tool.”
Now that the IP PIN tool is no longer available online, taxpayers who have lost or misplaced their IP PIN letter will need to call the IRS. If you call and you can verify your identity, you’ll be mailed your IP PIN and you can file normally. However, if you have lost or misplaced your IP PIN letter and you have moved since January 1, 2016, you must file a paper tax return; in that event, a paper return takes longer to process and will receive additional scrutiny.
If you are part of the pilot program (Florida, Georgia and District of Columbia participants) and have not yet retrieved your IP PIN, you won’t be able to use the IP PIN tool but may file your tax return as normal. If you are a part of the pilot program and have already retrieved your IP PIN, go ahead and file with that IP PIN.
Taxpayers who have filed a form 14039, Identity Theft Affidavit, (downloads as a pdf) because they were victims of non-tax identity theft and who already have retrieved an IP PIN should include it on their tax returns.
Note that you shouldn’t confuse the IP PIN with the 5 digit PIN you use to e-file your returns: those PINS aren’t interchangeable and are not affected by this announcement.
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