Do I Need an Identity Protection PIN to File My Return?

Many taxpayers, who had difficulty filing their 2013 federal tax returns due to identity theft or potential fraud, as well as many tax practitioners, are confused about how to file their 2014 federal tax returns.

Taxpayers who informed the IRS that they were a victim of identity theft or suspected they were a potential victim of fraud by filing an Identity Theft Affidavit with their 2013 federal tax return should have received a notice from the IRS verifying the taxpayer’s identity. In some cases, the taxpayer should have been provided an Identity Protection Personal Identification Numbers (IP PIN).

What is an IP PIN, exactly?  An IP PIN is a six-digit number the IRS annually assigns certain taxpayers who are at risk for identity theft. The IP PIN is included on the taxpayer’s federal tax return to authenticate that they are, in fact, the rightful filer of the return.

However, some taxpayers haven’t received (or don’t remember receiving) an IP PIN notice from the IRS. If a taxpayer files without the IP PIN it will delay processing of their federal tax return as the IRS will need to take additional steps to verify their identity. Nonetheless, not all of these taxpayers are required to file with an IP PIN.

There are two types of IRS notices to the Identity Theft Affidavit (1) Notice CP01A, the IRS has “validated” the taxpayers as a victim of identity theft and (2) Notice CP01, the IRS “verified” the taxpayer’s claim of identity. So what’s the difference?

  1. (1) The CP01A notice confirms verification of the taxpayer’s identity and validation of the taxpayer’s identity theft. The IRS has placed an indicator on the account and will more closely monitor the activity, notifying the taxpayer of possible issues. Additionally, the IRS has provided the taxpayer with an IP PIN, which is valid for the filing of their current year federal tax return only.
  2. Additional notices are issued for subsequent years by January for the new filing seasons as long as the taxpayer’s tax account remains at risk for identity theft. Please keep in mind that for the 2014 tax season there was a delay in sending these notices, but that taxpayers should have received them by the end of February.
  3. If a taxpayer is a victim of identity theft and has lost or misplaced their current IP PIN, they can retrieve their IP PIN using the IRS’s IP PIN page or call Identity Protection Specialized Unit at 1-800-908-4490.
  4. (2) The CP01 notice is similar to the CP01A, but CP01s do not include an IP PIN assignment for the recipient. Just like the CP01A notice, the CP01 notice informs the taxpayer that the IRS has verified the taxpayer’s identity and that an identity theft indicator has been placed on their account. The IRS will more closely monitor the taxpayer’s account and notify them of possible issues.
  5. Many affected last year were not victims of identity theft other than someone potentially filing a fraudulent return using their SSN. As such, they are not expected to be at further risk and are not required to file their federal tax returns using an IP PIN; they should file their federal tax returns as normal. If the IRS finds someone attempting to use the taxpayer’s SSN to file a tax return, the taxpayer will be notified and provided with an IP PIN.

If a taxpayer is unsure about whether they received a CP01A notice of “validation” (IP PIN required) or a CP01 notice of “verification” of their identity (no IP PIN required) they should use the links above or contact the IRS’s Identity Protection Specialized Unit at 1-800-908-4490.

For additional questions on using the IP PIN see the IRS’s IP PIN FAQ page.

This blog post is a summary and is not intended as tax or legal advice. You should consult with your tax advisor to obtain specific advice with respect to your fact pattern.