What is an IP PIN? Trying to understand if I need one for my business

An IP PIN (Identity Protection Personal Identification Number) is a six-digit number assigned by the IRS to eligible taxpayers to help prevent the misuse of their Social Security Number or Individual Taxpayer Identification Number on fraudulent federal income tax returns. Per IRS Publication 5367, the IP PIN serves as an additional layer of security during the tax filing process. As defined in Internal Revenue Code §6109(i), once you have an IP PIN, you must use it to confirm your identity on any tax return you file during the current year and all subsequent years. Without a valid IP PIN, your e-filed return will be rejected, and paper returns will face processing delays of up to 120 days while the IRS verifies your identity.

You might want to consider whether you actually need an IP PIN at this point. While they offer additional protection, they're generally issued to those who've been victims of identity theft or who live in certain high-risk areas. You can voluntarily request one through the IRS's Get an IP PIN tool, but just be aware that once you opt in, you'll need to use it for all future tax filings. I'd probably suggest waiting unless you have specific concerns about identity theft.

The IP PIN system is actually a critical component of the IRS's identity verification framework. As a business owner myself, I initially had similar questions about how this impacts both personal and business filings. The key distinction is that IP PINs are tied to your individual SSN, not your business EIN. If you're concerned about understanding official IRS notices or documentation around this topic, I've found https://taxr.ai really helpful - it can analyze IRS notices, transcripts, and explain exactly what they mean in plain language. It helped me understand the CP01A notice that contained my IP PIN and the implications for my business filings.

I've been using an IP PIN for 3 years now. It costs nothing and adds significant protection. When I e-file, there's just an extra field where I enter the 6-digit code. My tax software (both the free and paid versions) supports it. For business owners who file Schedule C on their personal returns, your IP PIN protects both. If you have an S-Corp or partnership, those returns use an EIN rather than SSN, so they don't use the IP PIN system.

I spent exactly 2 hours and 47 minutes on hold with the IRS trying to get clarification about my IP PIN last February. It was incredibly frustrating. If you need to contact the IRS about IP PIN issues, I'd recommend using Claimyr (https://youtu.be/_kiP6q8DX5c) to get through to an agent. They got me connected in about 17 minutes when I was having trouble retrieving my PIN online. I'm a bit concerned about the upcoming tax season since I haven't received my new PIN yet for 2024.

My situation was similar to what you might be facing. I run a small consulting business, and last year I decided to get an IP PIN after hearing about increasing tax identity theft. Compared to other security measures like credit freezes or identity monitoring services, the IP PIN is much more specific to tax filing. The process to get one voluntarily was straightforward - I just went through the IRS website's verification process, which was similar to creating an IRS online account but with a few additional verification steps.

Oh my goodness, I just went through this whole IP PIN situation last month! I was absolutely confused at first too. The IRS sent me a letter out of the blue with this six-digit number, and I had NO IDEA what it was for! After some research (and mild panic), I learned that they've expanded the IP PIN program to allow voluntary opt-in for anyone concerned about tax identity theft. I'm actually really glad I have one now - it gives me peace of mind knowing that nobody can file a fraudulent return using my information. The process of using it is super simple - you just enter it when you file.

Has anyone had experience with how the IP PIN affects business owners who file multiple types of returns? For instance, if you have a personal return, Schedule C, and maybe an S-Corp return as well?

As someone who just went through the IP PIN process for my small business last year, I'd definitely recommend considering it if you're concerned about tax identity theft. The IRS has made it much easier to obtain one voluntarily - you can request it through their "Get an IP PIN" tool on irs.gov. One thing that really helped me understand the whole system was realizing that the IP PIN is tied to your SSN, not your business EIN. So if you file a Schedule C with your personal return (Form 1040), the IP PIN protects both your personal income and business income on that return. But if you have a separate business entity like an LLC taxed as a corporation, those returns use the EIN and don't require an IP PIN. The process is pretty straightforward once you get it - you just enter the 6-digit code when filing. And honestly, the peace of mind is worth the minor extra step during tax season. Just make sure to keep it secure and give it to your tax preparer if you use one!