IRS Temporarily Suspends their Identity Protection PIN Tool

As part of its ongoing security review, the IRS has temporarily suspended the Get an Identity Protection PIN tool on IRS.gov. The IRS has stated that it is conducting a further review of this application that allows taxpayers to retrieve their original IP PIN that was issued to them for calendar year 2016 online. The IRS is also looking to further strengthen the security features of this tool.

Taxpayers who were issued an IP PIN should continue to file their federal tax returns (and enter their IP PINs) as they normally would. 

The IRS offers the following guidance following the removal of this online tool:

• Lost or misplaced IP PINs – Individuals will need to call the IRS to verify their identity and the IRS will mail them their IP PIN. If they have moved since January 1, 2016 they must file their return on paper.
• Florida, Georgia, and District of Columbia pilot participants – Will not be able to obtain an IP PIN and may file their federal return as normal.

See the March 7 IRS Statement on IP PIN on the IRS website for additional information.

Additional State Requests/Actions and the IRS IP PIN for the 2016 Filing Season

As the January 19 start date for the 2016 filing season draws near, here are some of the new actions that States are instituting to help fight tax identity theft and refund fraud, as well as an update on the IRS Identity Protection PIN.

Request by States for Driver’s License for the Upcoming Filing Season
As part of their continuing effort to combat tax identity theft and fraud, States will be requesting additional information be included with the tax return to help them confirm that the return they are receiving is truly the taxpayer’s. Providing the requested information will help ensure that the taxpayer’s tax refund will go to them and not to an identity thief.

One piece of information that nearly all States will be requesting is information from the taxpayer’s and spouse’s driver’s license or state-issued identification card. Although a return will not be rejected if the requested information from the driver’s license or state identification card is not present in the taxpayer’s return, not providing this information may delay the processing of the return and cause a delay in receiving any refund associated with the return.

Other State Actions to help Prevent Identity Theft and Tax Fraud
Below are some examples of new processes put in place by Illinois, Alabama, and Virginia that begin in the 2016 filing season:

• Illinois will not be sending out refunds on returns filed in January and February until mid-March. For those returns filed after March 1, 2016, the refunds will be sent out within two to three weeks from the date the Illinois return is accepted.
  See the Illinois Refund Alert on the Illinois Revenue website for more information.
• Virginia has begun to issue 7 alphanumeric Personal Identification Numbers (PINs) to Virginia taxpayers who have been identified as victims of identity theft. If a Virginia taxpayer is issued a PIN they must enter it on their Virginia individual income tax return to ensure that it is processed in a timely manner.
  See the Tax Related Identity Theft Prevention page on the Virginia Department of Taxation website for more information.
• Alabama will delay issuing refunds this year on returns for which the state has not received the W-2(s) from a taxpayer’s employer(s). This means that early Alabama filers will not receive their refunds as quickly as they have in prior years.

IRS Identity Protection PIN (IP PIN)
Beginning with the 2016 filing season, the IRS requires that an identity protection PIN (IP PIN) be entered on the 2015 tax return if an individual that is claimed as a dependent on a tax return has received an IP PIN from the IRS. Otherwise, the IRS will reject the tax return.

As a reminder, the IRS issues IP PINs to individuals who have had an identity theft indicator applied to their IRS tax account. These individuals will receive the IP PIN via IRS notice CPO1A this month (January).

Important Note: Due to an error, the IRS is emphasizing that all IP PINs that are contained in the CP01A notices that an individual receives this month (January) are for filing the 2015 tax return even though the notices incorrectly state they are for filing the 2014 tax return.

Other things to know about the Identity Protection PIN:

• If an individual loses their IP PIN, the original can be retrieved via the online IRS Get an Identity Protection PIN tool on the IRS website.
• Individuals who had an IP PIN in 2015 (for Tax Year 2014) should have received a new 6 digit IP PIN from the IRS this month (January) via IRS notice CP01A.
• When the taxpayer’s, spouse’s and/or dependent’s IP PIN is entered in the CrossLink program, they will be transmitted to the IRS as part of the Form 1040. The taxpayer’s IP PIN will print on Form 1040 in the area designated in the signature area. The Spouse’s and Dependent’s IP PIN will not print on the Form 1040 because the IRS has not included a place for them on the printed Form 1040.
• The IRS may also invite an individual to get an IP PIN by sending them a letter because their account met specific criteria that made them eligible to receive an IP PIN.

See the Identity Protection PIN page and the IP PIN FAQ page on the IRS website for more information.

IRS Update: Reminders for Upcoming 2015 Filing Season

As the January 20 start date for the 2015 filing season draws near, it is important to review the IRS Identity Protection PIN program and the new IRS direct deposit limit.

Identity Protection PIN

For the upcoming filing season the IRS will issue 1.7 million Identity Protection PINs (IP PIN) to individuals who have had an identity theft indicator applied to their IRS tax account.

These are the key items to know about the Identity Protection PIN:

• If a taxpayer received an IP PIN last year they should have received a new 6-digit IP PIN from the IRS in December via IRS notice CP01A.
• If a taxpayer received an IP PIN, the taxpayer and spouse must enter their IP PIN on their 2014 federal return or the IRS will reject the return.
• Read More

New IRS Direct Deposit Limits

Beginning this filing season, the IRS will be limiting the number of refunds that may be electronically deposited into a single financial account or pre-paid debit card to three (3).

Any subsequent deposits will be automatically converted to a paper refund check and mailed to the taxpayer at the address shown on the federal return... Read More

Click here to read the entire CrossLink Tax Update on reminders for the 2015 Filing Season.

Changes to the IRS Identity Protection PIN Program for the 2014 Filing Season

The IRS is making the following changes to their Identity Protection PIN program for the 2014 Filing Season:

• If the spouse receives an Identity Protection PIN (IP PIN), they must include it on their electronically filed federal return. If it is not included or is entered incorrectly, the return will not be accepted by the IRS.
  The taxpayer will continue to also be required to include their IP PIN on their federal return as they have since this IRS program began two years ago.
• If the taxpayer and/or spouse lose or misplace their IP PIN they will need to get their original IP PIN via the new online IRS Identity Protection PIN system on the IRS website.
  In order to obtain their original IP PIN the taxpayer and/or spouse will need to go through a registration process to validate their identity. This process is to ensure that the IP PIN is being given to the correct taxpayer and to protect the taxpayer's personal and tax information.
  For taxpayers who are unable to use the online tool, or do not want to use it, they can obtain a replacement IP PIN by calling the IRS at 1-800-908-4490, extension 245. If a taxpayer receives a replacement IP PIN, the processing of their return and the issuance of their refund will be delayed.

Other things to know about the IRS Identity Protection PIN program are:

• The IRS will be issuing 1.2 million Identity Protection PINs for the upcoming season. IP PINs are issued to all taxpayers that have had an identity theft indicator applied to their IRS tax account.
• Affected taxpayers should have received IRS Notice CP01A from the IRS in December 2013. This notice includes their 6-digit IP PIN and information on the use of it.
• The Identity Protection PIN received by the taxpayer and or spouse in December 2013 is only valid for use on their 2013 federal individual return. Those who received an IP PIN for 2013 will receive a new IP PIN each year for as long as their IRS account has an identity theft indicator associated with it.
• When the taxpayer and/or spouse IP PIN is entered in the CrossLink professional tax software program, they will be transmitted to the IRS as part of Form 1040. The taxpayer's IP PIN will print on Form 1040 in the area designated for this purpose in the signature area. The spouse's IP PIN will not print on the Form 1040 because the IRS did not add it to the printed Form 1040 for tax year 2013.

For more information see the following:

• Understanding Your CPO1A Notice for more information about the IRS Identity Protection PIN and a copy of what this notice looks like and tells the taxpayer.
• IRS Identity Protection PIN Frequently Asked Questions
• Lost or Misplaced IP PINs page on the IRS website for further information on what to do if the taxpayer loses or misplaces their IP PIN.

IRS Identity Protection PIN

The IRS is expanding the number of taxpayers who will receive an Identity Protection Pin (IP PIN) for the upcoming season. All taxpayers that have had an identity theft indicator applied to their IRS tax account will receive an IP PIN that must be included on their 2012 Federal income tax return. This means that approximately 600,000 taxpayers will receive an IP PIN for the upcoming filing season.

The affected taxpayers will receive their IP PIN in a notice (Notice CP01A) from the IRS in December 2012. This notice will include their 6-digit IP PIN and information on the use of the IP PIN.

If you know that any of your customers have been the victim of identity theft you may want to inform them that they will be receiving this notice in December. They will need to keep it and bring it in with the rest of their tax information when they come to have their 2012 income tax return prepared.

Other changes to the IP PIN program that you need to know:

• If the taxpayer was issued an IP PIN they must include it and have it entered correctly on their 2012 Federal return or the IRS will reject their return. The inclusion of the IP PIN will allow the return to be processed normally and will not delay their refund.
• If the taxpayer loses the notice that includes their IP PIN they can call the IRS Help Desk. Once they have authenticated who they are, they will be issued with a replacement IP PIN.
• Click here to read more.

Click here to read the entire CrossLink Tax Update that includes further information on the IRS Identity Protection PIN.