Protect Your Tax Return: Essential Steps for Identity Verification

Protecting Your Tax Return from Identity Fraud

Identity theft has emerged as a significant threat affecting millions of taxpayers annually, causing substantial delays in tax return processes and creating a heavy burden for many families. During the 2024 filing season, the IRS flagged millions of returns due to potential fraud, resulting in over 1.9 million tax returns being put on hold for identity verification. For those impacted, it can be a frustrating experience. However, there are several proactive steps taxpayers can take to safeguard their identity and expedite the processing of their returns.

What Is an Identity Protection PIN?

One effective tool is the Identity Protection PIN (IP PIN). This unique number is known only to the IRS and the taxpayer, offering an extra layer of security. Any taxpayer wishing to shield themselves from tax-related identity theft can request an IP PIN. Taxpayers who have previously experienced identity theft will automatically receive an IP PIN upon resolution of their case. Not only does this prevent impersonation, but it also gives you a yearly opportunity to enhance your security.

Responding to the IRS: A Vital Step

If your return is flagged, the IRS will reach out with a letter detailing the need for identity verification. Failure to respond promptly can delay your refund substantially. Key letters you may receive include:

• Letter 5071C: Potential Identity Theft during Original Processing with Online Option
• Letter 4883C: Potential Identity Theft without Online Options
• Letter 5447C: Specifics for Foreign Address Holders

Setting Up an Online IRS Account

Establishing an online IRS account is an excellent way to manage your tax information securely. This account allows you to access your tax records, make payments, and more—all while maintaining a secure verification process through ID.me. If you’re a first-time user, get ready to verify your identity through straightforward steps, including uploading a government ID. Remember, protecting your personal information online is crucial.

The Importance of Checking Your Tax Transcripts

Once you’ve set up your account, checking your tax transcripts is essential. This will inform you of any updates or potential hold-ups in processing your return. If you see a code 570, it could indicate a pending request for additional information, which may include verification of your identity. Stay on top of these requests to ensure no further delays.

Conclusion: Stay Vigilant and Informed

Being aware of identity verification processes mandated by the IRS is invaluable in today’s world, where identity theft is rampant. With proactive measures like obtaining an IP PIN, responding promptly to IRS letters, establishing an online account, and monitoring tax transcripts, you can navigate tax season more efficiently.