IRS Acknowledges Identity Protection PIN Blunder

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By Tax-News

The US Internal Revenue Service (IRS) has admitted that, due to an error, individual taxpayers are receiving Identity Protection Personal Identification Number (IP PIN) letters with an incorrect tax year listed.

The CP 01A Notice dated January 4, 2016, being sent by the IRS incorrectly indicates that the IP PIN being issued is to be used for filing the 2014 tax return, when the number is actually to be used for the 2015 tax return. Taxpayers and tax professionals are being advised that the IP PIN is valid for use on all individual tax returns filed in 2016.

The letters were mailed in late December, and taxpayers will be receiving them until mid-January. The IRS has apologized for the confusion and any inconvenience, and confirmed that it will begin accepting returns from taxpayers from January 19, 2016.

The IP PIN is a unique, six-digit number that is assigned annually to victims of identity theft with resolved cases, for use when filing their federal tax return. The IP PIN allows these individuals to avoid delays in filing returns and receiving refunds. When a taxpayer has an IP PIN, it prevents someone else from filing a fraudulent tax return with his or her Social Security number (SSN).

If a return is e-filed with the SSN and an incorrect or missing IP PIN, the agency’s system will reject it until it is submitted with the correct IP PIN or a paper return is filed. If the same conditions occur on a paper-filed return, the IRS will delay its processing and withhold any refund until it is determined if it is due to the proper taxpayer.

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.