In 2023, consumers across the United States lost a total of more than $10 billion to fraud, according to the Federal Trade Commission. More than a million of them were victims of identity theft, with reports of these and other types of scams up from the previous year.
With identity theft and taxpayer fraud on the rise, the Internal Revenue Service (IRS) is encouraging taxpayers to take extra caution when filing tax returns. One simple way to help safeguard your identity is to create an identity protection personal identification number (IP PIN) through the IRS. An IP PIN is a six-digit number that helps the IRS verify your identity when you are filing your tax return.
The IP PIN program was introduced to help combat the growing problem of tax-related identity theft. In these cases, fraudsters use stolen Social Security numbers (SSNs) and other personal information to file false tax returns and claim fraudulent refunds. Identity theft in tax filing has become a major issue for the IRS, causing financial losses and delays for victims who have to work with the agency to sort out the theft.
The IP PIN program was initially implemented to help higher-risk groups of taxpayers, such as high-net-worth individuals and those who had previously reported identity theft to the IRS. However, as tax-related identity theft grew, the IRS expanded the program to allow all taxpayers to request an IP PIN voluntarily. This move empowers taxpayers to be proactive in protecting their tax filings.
Taxpayers who enroll in the program must use their IP PIN when filing their federal tax return, either electronically or on paper. The IP PIN helps verify the taxpayer’s identity, ensuring that only authorized individuals can submit a return with their SSN. If an individual’s IP PIN is missing or incorrect, the IRS will reject the filing, helping prevent unauthorized filings.
You can receive an IP PIN through the IRS website by verifying your identity using the “Get an IP PIN” online tool. Once enrolled, the IRS issues a new IP PIN each year to maintain the security of your information. You can always retrieve your IP PIN if you lose it; find instructions on how to do so via the IRS website.
Paying taxes is not only mandatory but also helps to keep the government running. However, doing so can expose individuals to potential risks, especially when done electronically. Tax-related identity theft can cause significant financial and personal stress, delay tax refunds, and require time and effort to resolve. With more people filing online, the IRS emphasizes the need for enhanced security to ensure taxpayer data remain safe.
In addition to the IRS’s IP PIN program, you can also take additional precautions. Here are some recommendations:
By providing taxpayers with an extra layer of security, the IRS’s IP PIN program helps prevent unauthorized access to sensitive information. Working with a trusted tax professional can help reduce the risk of fraud and identity theft. With an experienced estate planning attorney, you can pursue strategies to reduce the amount of taxable assets you have and help you plan for your future.
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Every person's financial situation and family dynamics are unique. We will take the time to understand your goals and circumstances, allowing for the creation an estate plan that suits your individual situation.
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Engaging a law firm for estate planning provides peace of mind, knowing that your affairs are in capable hands. It allows you to focus on enjoying your life without the constant worry of what may happen to your assets and loved ones in the future.
Estate planning involves various legal instruments, such as wills, trusts, powers of attorney, and healthcare directives. We specialize in estate planning, ensuring that your documents comply with the ever-changing state and federal laws. We can help you navigate intricate legal requirements, minimizing the risk of costly errors and potential disputes.
Every person's financial situation and family dynamics are unique. We will take the time to understand your goals and circumstances, allowing for the creation an estate plan that suits your individual situation.
We can assist you in structuring your estate plan to protect your assets from potential creditors, lawsuits, and taxation. Our experience can also help you employ strategies to minimize tax liabilities.
Probate is the legal process through which a deceased person's assets are distributed. It can be time-consuming and costly. We can help you explore options to minimize or avoid the probate process, allowing your beneficiaries to receive their inheritances more quickly and efficiently.
When estate plans are unclear or disputed, it can lead to conflicts and legal battles. We can help you draft clear and legally sound documents that minimize the chances of disputes among heirs and beneficiaries. In the event that a dispute arises, we can also represent your interests and work toward an amicable resolution.
Estate plans need to be reviewed and updated periodically to reflect changes in your financial situation, family dynamics, and applicable laws. We can provide ongoing support and guidance, ensuring that your estate plan remains current and effective.
Engaging a law firm for estate planning provides peace of mind, knowing that your affairs are in capable hands. It allows you to focus on enjoying your life without the constant worry of what may happen to your assets and loved ones in the future.
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