It is estimated that in the 2013 filing season alone, over 5 million tax returns were filed using stolen identities, claiming approximately $30 billion in refunds, according to the IRS. The good news is that 81% of those fraudulent claims were stopped. To stop identity thieves from cashing in on your tax return, the IRS has created a new tool to keep you protected, even if scammers have social security number and other sensitive information. IRS Identity Protection PIN (IP PIN) sets up a six-digit number that prevents scammers from filing a fraudulent tax return using your Social Security number. Previously, only victims of identity theft qualified for an identity protection PIN, but all taxpayers are eligible to use it in 2021. The only downside is you can’t use the same PIN every year. The IRS will mail you a new one each year before tax season. So if you want a PIN for your 2020 return, go to the IRS’s site and select the blue button labelled “IP PIN tool.” You will need your Social Security number or tax ID, a phone number, and identifying information for financial accounts in your name (such as a credit card or mortgage). The process can take a lot of time, so be prepared. Also be sure to keep this number somewhere safe as you can not change it (another layer of protection). Considering that the social security numbers of nearly half the country have been compromised in some way, it is a safety measure you may want to employ as soon as possible.
SOURCE: Two Cents