By Foster Woodburn, CPA, Tax Associate
On March 7, the IRS released a statement announcing a temporary suspension of its online Identity Protection Personal Identification Number (IP PIN) retrieval program. IP PINs were originally issued in tax year 2011 to taxpayers who had fallen victim to tax refund fraud. An IP PIN is a 6 digit code designed to prevent future fraudulent returns from being filed.
The IRS provided instructions for online retrieval of any lost or misplaced IP PINs. In order to recover a lost IP PIN, a taxpayer simply had to answer four knowledge-based authentication questions such as past residence or mortgage principal balances. The problem was that the answers to these questions could either be easy to guess or simply bought online, allowing cyber criminals to retrieve a taxpayer’s IP PIN and fraudulently file for a tax refund.
According to the IRS’s March statement, 2.7 million taxpayers received IP PINs via mail during the current filing season. Of those, 130,000 used the online process to recover a lost or misplaced IP PIN. And still of those, 800 filers were caught fraudulently using the online retrieval process through the end of February. Although a relatively small number, it is unknown how many more IP PINs were fraudulently recovered online undetected. As a result, the IRS temporarily suspended the online IP PIN retrieval program in order to strengthen its security measures.
Taxpayers who legitimately lost their IP PINs can still recover them by calling the IRS. Any taxpayers who have IP PINs will not be affected by the temporary suspension unless they have lost or misplaced the six-digit number.
To read the IRS’s statement in full, you can visit the following link:
Foster Woodburn is a Tax Associate at Keiter. Read more of Foster’s insights on our blog.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.