Identity Theft: How to Secure Your IRS Tax Account

How to Secure Your IRS Tax Account and Protect Yourself from Identity Theft

Your personal information has likely been exposed to one of the largest data breaches in history. Even if you've been careful, a massive hack at National Public Data has compromised the personal details of millions of Americans, including Social Security numbers, full names, dates of birth, and more.

This means your sensitive information could now be in the hands of cybercriminals. With this data, they can steal your identity, take out loans, open credit cards, or even file fraudulent tax returns in your name. That’s why it’s important to take action—especially when it comes to your IRS taxpayer account.

Hi, my name is Noel Lorenzana, and I’m a CPA with over 20 years of experience in taxes. Today, I’m going to show you the steps you can take to protect your IRS account, including the most powerful tool to stop taxpayer identity theft—the IRS IP PIN.

What Is an IRS IP PIN and Why You Need It

The IRS IP PIN (Identity Protection Personal Identification Number) is a unique six-digit code the IRS issues to protect your tax return from being fraudulently filed by someone else. Even if a scammer has your Social Security number, they won’t be able to file your taxes without this PIN.

Here’s how the scam works: a criminal buys your Social Security number and other personal details for as little as $100. They then use this information to file a fake tax return and claim a large refund. Since the IRS is unaware, they process the fraudulent return and send the refund to the scammer.

When you go to file your real tax return, it gets rejected because, according to IRS records, you’ve already filed. Fixing this mess can take two years or more! That’s why I’m recommending that everyone gets an IRS IP PIN right now to secure their account.

Once you have an IRS IP PIN, no one can file a tax return in your name without it—even if they have your Social Security number. The IRS provides you with a new PIN each year, adding an extra layer of security to your account.

How to Get Your IRS IP PIN

Getting your IRS IP PIN is easy, and here’s how you do it:

1. Visit the IRS Website: Go to irs.gov and navigate to the "Get an Identity Protection PIN" page.
2. Log In or Create an Account: If you don’t already have an IRS account, you’ll need to create one.
3. Verify Your Identity: The IRS will ask for details like your Social Security number, tax filing status, mailing address, and a financial account number.
4. Receive and Store Your IP PIN: Once you get your IP PIN, keep it safe. You’ll need it every time you file your tax return, and retrieving a lost PIN can be challenging.

What to Do if You Lose Your IRS IP PIN

If you lose your IP PIN, you won’t be able to file your tax return electronically and will need to file a paper return. While this can be inconvenient, it’s a small hassle for the security and peace of mind the IP PIN offers. You can retrieve a lost PIN through your IRS account or by calling the IRS at 1-800-908-4490.

Protect Yourself from Identity Theft

While the IRS IP PIN is a powerful tool, it’s not the only step you should take. Here are some additional actions to help protect your personal information:

• Freeze Your Credit: Place a security freeze on your credit reports with the three major credit bureaus—Equifax, Experian, and TransUnion—to prevent criminals from accessing your credit information.
• Set Up Fraud Alerts: Fraud alerts require creditors to verify your identity before opening new accounts.
• Monitor Your Credit Reports: You’re entitled to a free credit report from each bureau every week. Use this to catch suspicious activity early.
• Create a My Social Security Account: Set up an account on the Social Security Administration’s website to prevent identity thieves from creating one in your name.
• Beware of Phishing Scams: Be cautious of emails, phone calls, or texts asking for personal information.
• Use Strong Passwords: Ensure you use strong, unique passwords for your accounts and enable multi-factor authentication whenever possible.
• Monitor Your Financial Accounts: Regularly check your bank and credit card statements for unusual transactions.

Take Action Today

In today’s world, identity theft can happen to anyone, often when you least expect it. But by being proactive and staying vigilant, you can reduce your risk of becoming a victim.

Getting an IRS IP PIN, freezing your credit, and monitoring your accounts can make a huge difference in protecting yourself from fraud. Remember, identity theft is a real threat, but with these steps, you can keep your personal and financial information safe.

That's about it. I hope you found this blog post helpful. Feel free to share your questions or stories in the comment section of my YouTube video—I’d love to hear from you! And while you are there, please give it a thumbs-up, and don’t forget to subscribe for more tips on protecting yourself and your finances. Thanks for reading!