Ask The California Employment Tax And Payroll Tax Attorney – The New Irs Identity Protection Pin Opt-in Program

By Robert S. Schriebman 2020

Introduction

Every year, for the past 5 years, the IRS holds a Security Summit Conference with its Summit partners including state tax agencies and the nation’s tax industry.  Out of this annual conference comes new and updated ways professionals and you can protect themselves from scammers and thieves stealing your identity and your tax refund.  This year the IRS has developed an Identity Protection PIN Opt-In Program for all eligible taxpayers.  This new program will be available to the public in mid-January 2021.  Those taxpayers who have been the victims of stolen refunds, have been members of this program since 2019.

The New Identity Protection PIN Opt-In Program

The IP Pin is available free of charge to eligible taxpayers. It is a 6-digit number that will be assigned to you to help prevent the misuse of your Social Security number and will afford protection from being on the receiving end of a fraudulent federal income tax return.  The IP PIN helps the IRS verify a taxpayer’s identity and allows the IRS to accept their electronic or paper tax returns.  The online Get An IP PIN tool at IRS.gov/IPPIN immediately displays the taxpayer’s IP PIN.

According to IRS Commissioner Chuck Rettig’s, “When you have this special code, it prevents someone else from filing a tax return with your Social Security number.”  Getting the IP PIN is not a slam dunk, and it is not available to everyone. According to Commissioner Rettig, you must pass a rigorous authentication process.

If you cannot pass the access process or you have an income of $72,000 or less, you are instructed to complete IRS Form 15227 and send it to the IRS by mail or FAX.

Victims of tax refund fraud who already have an IP PIN must continue to use it and cannot opt-out of this program.

Once you obtain your IP PIN keep it sacred.  Don’t share it with anyone, except on a need-to-know basis. Scammers may try to obtain this information through an email or a telephone call.  Keep in mind that the IRS neither communicates through email nor by telephone.  If you get a call or email, go with your gut, do not click on any link, and do not give out any information.

According to new IRS press release IR-2020-267 (December 3, 2020), here is what you need to know about the IP PIN before applying:

• The application process will be available mid-January 2021.
• The IP PIN is valid for one year and must be renewed every January. This does not apply to previous victims of tax refund frauds.
• The IP PIN must be properly entered on an electronic and paper tax returns in order for those returns to be processed promptly.
• If you wish to opt-out of the program, you cannot do so until 2022. This does not apply to previous victims of tax refund fraud; they cannot opt-out of this program.
• For married taxpayers filing joint returns, each spouse should apply for their own IP PIN.

Conclusion

On December 3, 2020 the IRS released the above information relating to individuals obtaining IP PINs. On December 5, 2020, the IRS and the Securities Summit issued a press release providing protections for tax professionals and tax return preparers.  This will be the subject of the next article.

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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD and he is not employed by the EDD or any other agency of the State of California.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

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