What is an IRS IP PIN and CP01 Letter?

By | December 5, 2015

Which brings us up to the IP PIN: once a case is resolved, the taxpayer is going to receive a CP01 letter saying, “We have resolved your identity theft case. It’s over. It’s done. You’re finished.” In December, if they get the case resolved fast enough (usually by a cutoff date in mid-November), we are going to send them a CP01 letter. The CP01 letter is a letter that contains their Identity Protection PIN.



What is an IRS IP PIN and CP01 Letter?

We send it out once a year in December to the address of record. Now, we know that some taxpayers move, and we’ve got a way around that. We use it for self-reported people: people who call us and say, “I’ve been a victim;” victims that we identify through different fraudulent filings; and the program you’ve all heard of from Florida, Georgia, and District of Columbia. The reason these were picked: these are the highest areas, per capita, of identity theft in the country. For those of you who have heard about Florida being a hotbed of identity theft, Florida was not number one. Washington, DC, was number one per capita in the country. So, that’s why they are there. So, if they went through our program, they are going to get a CP01 letter in December.


What is an IRS IP PIN?

What the IP PIN does is it authenticates the taxpayer. It acts as one more layer of authentication. It’s a six-digit number (not the five-digit) that we change every single year, send to the taxpayer, and it puts one more level on to make sure that that is the right person. Nobody in IRS knows that number except for your client. Our assistors don’t know the number. Our people who are processing don’t know the number. When they file the return, it goes on the return, and it’s matched against our master file. It’s either denied or allowed (and goes through). Nobody in IRS can actually give them that number again.


Results of IRS IP PIN program

The results of our IP PIN program: as the commissioner said, they are under review. We want to see, one, what the appetite is. Is this something the taxpayers want? If we put it out there and they don’t want it, then why offer it? Is there a better way to do it? What was the success rate with people who were victims before who went in and said, “Well, I want to do this on my own”? So, we actually went through, and we’re looking at that. We will probably have a study. Right now, anybody in these three states, regardless of whether they are a victim or not, can go in and file for an IP PIN. We are looking to see whether it can be expanded to the rest of the country, and we will work forward from there.


What is IRS Letter CP01A?

Again, a new number is received every single year in a CP01A. There is no opt-out condition right now. This is part of the problem with offering it nationwide. Once you get an IP PIN, you are getting one every single year. We cannot get you out of the program. One of the things we did change – and again, I said, “Nobody knows what that number is” – if your taxpayer loses the number or has moved and doesn’t get the IP PIN, there is a way they can get it. They can go online to the identity theft website on IRS.gov and it explains all this. Or they can go to www.irs.gov/getanIPPIN (it is all one word), and after going through and creating an account, they are going to need a valid email address that they can access during their account creation.



Creating IRS PIN

They will create an account, pass the authentication questions, and we will give them their original IP PIN right there on the spot. It will not be replaced, but it will be their actual IP PIN. After that, they can go in and get that every single year online if they want, or they can wait for the letter. But we are looking at… because what was happening was taxpayers were calling in and we were giving them what is called a Replacement IP PIN, and this is still going to happen. If somebody calls into our assistors and they say, “I’ve lost my IP PIN. I need my IP PIN,” we are going to authenticate the taxpayer over the phone. But because it’s a phone authentication and we can only do so much, we are going to give them a Replacement IP PIN, but it is not going to be their original IP PIN.

What is going to happen is it’s guaranteed it’s going to delay processing because, while the PIN is going to allow the return to get accepted if you are filing electronically, it is not going to post it. It is only going to accept it. It’s going to go to our unpostables unit where people are going to manually verify this is the right person. So, if they call up our taxpayer service number and they get an IP PIN through that, tell your client you can guarantee that it is going to be delayed. And I don’t know how long it’s going to be; depending if they filed during peak season or not.

All right, the future of our victim assistance. One of the things we are always asking ourselves is, “How can we better serve the victim?” Because if any of you have ever been victims yourself, you know it is a traumatic experience. You are going to call an organization you really don’t like about a situation you like even less. So, you are already behind the ball. So, what we are going to do is we’re moving towards more online products. We want to find out later on if we can make the 14039 an electronic process. Can we file it electronically?

If we have a big data breach and you’ve got – let’s say OPM – you’ve got 24 million people. And all 24 million people in OPM say, “Well, my Social Security number was on that file. I’m going to file a 14039.” Within three weeks, we receive 24 million 14039s. The delay in processing is going to be extensive. So, the question is “Can we make this an online product?” One of the questions of this was “Can we make the retrieval of the IP PIN electronic?”, and we did. We put it up on the website. We have a methodology for doing it, and it’s made it a whole lot easier.


IRS Identify Theft Terms

Form 14039, Identity Theft Affidavit – Complete and submit this form if you are an actual or potential victim of identity theft and would like the IRS to mark your account to identify questionable activity.

Identity Protection Personal Identification Number (IP PIN) – An IP PIN is a 6-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number on fraudulent federal income tax returns. An IP PIN helps the IRS verify a taxpayer’s identity and accept their electronic or paper tax return.

Letter 4883C – This letter is for suspicious prior-year returns. These taxpayers must call the IRS Taxpayer Protection Program toll-free number that is on the letter in order to verify their identities and let IRS know if they did or did not file the return.

Letter 5071C – This letter is for suspicious current-year returns. These taxpayers are asked to first verify their identities online at www.idverify.irs.gov. In order to verify the identity of the taxpayer, the Out-of-Wallet (OOW) website requires the user to correctly answer disclosure questions and additional personal questions that only the valid taxpayer is likely to know. They can also use this website to inform IRS if they did or did not submit the return in question.

Letter 5447C – This is for suspicious returns that have a foreign address. These taxpayers must verify their identities with IRS by either calling an international Taxpayer Protection Program line or by mail.

Tax-related identity theft – Tax-related identity theft occurs when someone uses your stolen name and Social Security number to file a tax return claiming a fraudulent refund, or when someone uses your Social Security number to obtain employment.