For optimal viewing experience, please use a supported browser such as Chrome or Edge

Download Edge Download Chrome

Protecting Your Tax Identity Doesn’t Have to Be Taxing

Published on January 15, 2025 | 3 min read | Webster Bank

When you think of identity theft, you may think of unauthorized credit card payments or new lines of credit. However, tax identity theft is one of the most common types of identity theft — and it’s also the most common fraud attempt during tax filing season.1

If your identity is stolen for tax purposes, you can find yourself waging battle on two fronts: against the identity thief and the IRS. Fortunately, protecting your tax identity doesn’t have to be difficult. Below, we explain a couple of ways you can theft-proof your ID.

Identity Protection PIN

The IRS can issue an identity protection pin (“IP PIN”) that will prevent anyone else from filing a tax return using either your Social Security number or your individual taxpayer identification number (“TIN”).

Only you and the IRS will know your IP PIN, and the identity verification process required to qualify for an IP PIN helps prevent fraud. Your IP PIN is valid for just one calendar year, and the IRS will generate a new PIN each year for as long as you’d like one.

To get an IP PIN, you can either confirm your identity through an online process or file an application in person at a local IRS office.2 Keep this PIN in a secure place, since entering the wrong IP PIN on your electronic or paper tax return will cause it to be rejected. Also remember that the IRS will never ask you for your IP PIN, so don’t reveal this PIN to anyone but your tax professional.

Identity Protection Software

Along with the IP PIN issued by the IRS, there are several different types of identity protection software that can prevent your SSN from being used anywhere without your consent. These programs will ensure you receive notifications whenever someone is trying to use your personal information for their own gain.

These programs aren’t specifically for protecting your tax identity, however; they will also lock your credit at credit bureaus to prevent others from taking out loans or lines of credit using your personal information. This means that whenever you’d like to apply for a new credit card or refinance your mortgage, you’ll need to have this credit lock temporarily lifted and then re-applied.

Because of the above factors, if you’d prefer to protect only your tax identity—not your total identity—an IP PIN may be the way to go.

 

Important Disclosures:

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking # 1-05345916.

Footnotes

1  “Identity Theft Reports by State, 20022,” IPX 1031, https://www.ipx1031.com/id-theft-by-state-2022/

2 “Get an Identity Protection PIN,”  Internal Revenue Service, https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin

Related Resources

Webster InvestmentsArticles
Navigating Financial Success: Retirement Savings While Raising a Child with Developmental Disabilities
Being a high earner not rich yet (HENRY) may come with financial challenges. When coupled with the responsibility of raising a child with developmental disabilities, you might need thoughtful financial planning even more. Here are a few strategies that may help you save for retirement while managing your child’s well-being. Craft a Comprehensive Financial Plan […]
Webster InvestmentsArticles
The Financial Impact of Mental Health
Mental health is essential to everyone’s wellbeing. Mental health disorders, diagnosed or not, may be playing a role in your daily life. Often, financial problems or worries may impact your mental wellbeing, especially if you’re anxious or depressed about your situation. Mental health complications impact people in various ways, sometimes even causing financial strife. Below, […]
Webster InvestmentsArticles
Caught in the Middle: Sandwich Generation Stress and the Importance of Social Wellness
The “Sandwich Generation” wakes up every morning with a lot on their plates. They not only have to provide support for themselves and their own children but also help to take care of aging parents. For many, this is both physically and mentally exhausting.1 Unfortunately, with so little free time, many of those in this generation […]

Connect With Us

Learn more about Webster Bank products, services and the communities we serve.
We’d love your feedback
×