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Should You Have an Identity Protection PIN?
Article Highlights:
- Taxpayer First Act
- Taxpayer Notification when a SSN is Fraudulently Used
- Purpose of an IP PIN
- Obtaining an IP PIN
- Is an IP PIN Right for You?
Often, identity theft and refund fraud victims may be unaware that their identity has been used fraudulently, or when they are aware, they may not be fully informed of the outcome of their case. The Taxpayer First Act addresses this situation by requiring that the IRS notify a taxpayer if it determines any of the following: there has been any suspected unauthorized use of a taxpayer’s identity or of that of the taxpayer’s dependents; if an investigation has been initiated and its status; whether the investigation substantiated any unauthorized use of the taxpayer’s identity; and whether any action has been taken (such as a referral for prosecution). Furthermore, when an individual is charged with a crime, the IRS must notify the victim as soon as possible, giving the victim the ability to pursue civil action against the perpetrators.
An IP PIN is a six-digit number assigned by the IRS to eligible taxpayers. This pin helps prevent the misuse of taxpayers’ SSNs on fraudulent federal income tax returns.
The IP PIN was originally established several years ago to aid taxpayers whose SSNs had been used to file a fraudulent return or if a taxpayer’s SSN had been compromised and there was concern it could be used to file a fraudulent return. Recently, as a result of the Taxpayer First Act, the IRS has opened the IP PIN system to a variety of taxpayers.
In addition to taxpayers whose SSNs the IRS has determined are compromised for tax-filing purposes, IP PINs now are available to those who
- filed their federal tax return last year as a resident of Florida, Georgia, the District of Columbia, Michigan, California, Maryland, Nevada, Delaware, Illinois, or Rhode Island or
- received an IRS letter inviting them to “opt-in” to get an IP PIN.
To obtain an IP PIN, you must pass the IRS’s identity verification secure access process. To do that, you must register with the IRS and set up an online account that is only accessible with a username and password established during the registration process. This can require lots of verification information so the IRS can make sure you are not a scammer trying to obtain an IP PIN for someone whose identity has already been stolen. Next, you have to log into the IRS IP PIN Section, which requires double authentication: a password plus a 6-digit code that is sent to your cell phone. Once you have jumped through all those hoops, you can retrieve your IP PIN.
So, is an IP PIN right for you? That depends; the process is quite complicated, and you get a new number every year. So, you have to weigh the trouble and inconvenience it creates when your SSN has not been compromised with knowing you can always obtain an IP PIN if your SSN is compromised in the future or if you feel it may have been compromised. The decision is up to you.
Of course, if the IRS has already sent you a CP01A Notice - the annual communication from the IRS containing your unique 6-digit IP PIN and instructions on how to use it—you are already in the system.
Please give this office a call if you have questions about IP PINs.
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Get to Know Prestige Accounting Services Group (previously Prestige Wealth Accounting Group)
Offices in Flemington, NJ and Califon, NJ
Our Mission: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we are on a mission to redefine the tax experience for individuals and small businesses. With a focus on personalized service, strategic planning, and expert guidance, we aim to empower our clients to succeed financially with confidence and ease.
Expertise in Action: With a wealth of experience and a team of dedicated professionals, we specialize in individual and small business tax preparation. While we excel in all areas of taxation, our passion lies in serving the unique needs of small business owners in New Jersey. We understand that small business taxation requires specialized knowledge and attention to detail, which is why we go above and beyond to ensure our clients receive the guidance and support they deserve.
Tailored Solutions for Every Client: Whether you're a high-net-worth individual seeking comprehensive tax planning or a small business owner in need of accounting and bookkeeping assistance, we have the expertise to meet your needs. Our team takes the time to understand your specific situation and develop customized solutions that align with your goals and objectives.
Why Choose Us?: What sets us apart from other New Jersey tax firms is our commitment to excellence and innovation in the field of taxation. We don't just prepare tax returns; we provide strategic insights, proactive planning, and actionable advice to help our clients achieve their financial goals. With a team of two CPAs, an EA, and an ERO, we have the expertise and resources to deliver exceptional service and results.
Your Success is Our Priority: At Prestige Accounting Services Group (previously Prestige Wealth Accounting Group), we measure our success by the success of our clients. We are dedicated to building long-lasting relationships, providing unparalleled service, and helping our clients thrive in today's ever-changing tax landscape.
We can't wait for you to experience the Prestige Accounting Services Group (previously Prestige Wealth Accounting Group) difference.
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