For Americans counting on a tax refund to pay down debt, rebuild savings or catch up on bills, having someone else file a fraudulent return in their name could turn a financial lifeline into a paperwork nightmare.
The IRS is urging taxpayers to take steps now to protect their personal information — including one some taxpayers should take before an essential mid-November deadline.
In an Oct. 22 release, the agency advised Americans to safeguard their IRS online account credentials and obtain an Identity Protection PIN to help prevent criminals from misusing their identities.
“Protecting sensitive financial information is essential to preventing unauthorized users from accessing confidential tax information and IRS online services,” said IRS Chief Executive Officer Frank J. Bisignano.
He added that those precautions can help taxpayers “protect themselves from bad actors.”
Tax-related identity theft occurs when a criminal uses your Social Security number to submit a false return claiming a fraudulent refund. According to the IRS, your tax account is particularly vulnerable when stolen information includes both your Social Security number and financial details, such as wages.
And resolving a suspicious return can stand between you and your money.
The IRS says its Taxpayer Protection Program may send a letter asking you to verify your identity and return information. Until you respond, the agency cannot process the return or issue the refund.
Take this step before mid-November
The IRS offers a free tool to help protect you: an Identity Protection PIN, or IP PIN.
This six-digit number helps the agency confirm your identity and prevent someone else from filing a federal return using your Social Security number or individual taxpayer identification number.
You can request one from the IRS even if you aren’t required to file a return. For taxpayers planning to file early in 2027, the IRS recommends acting before its online PIN system becomes unavailable for annual maintenance in mid-November. It generally becomes available again in mid-January.
An important detail: the number changes annually. Online participants continuing into 2027 will need to retrieve their new PIN for that year. Keep it secure and enter the correct number when filing to avoid a rejected electronic return or delayed paper return.
Jing is an investment reporter for Moneywise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
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