Catch Me If You Can
Updated: Nov 25, 2020
Yes, that’s right! The movie, Catch Me If You Can, starring Leonardo DiCaprio where he played real-life con man, Frank Abagnale. Abagnale impersonated being a doctor, pilot, and even a prosecutor, but his best "skill" was forging checks.
That movie came out in 2002. In the almost twenty years since its release, identity theft has become a bigger problem. Since at least 2010, the IRS has been working on ways to combat identity theft as it relates to tax returns.
In 2010 the IRS introduced the Personal Protection Identity Pin. This is a six-digit number assigned to the taxpayer. This Pin must be included on any return submitted by the taxpayer, no matter who is submitting the return. Originally the IRS issued a Pin only to those taxpayers who had experience someone filing a tax return using their information.
If you are a confirmed victim of identity theft and the IRS has resolved your tax account issues, the IRS will mail you a CP01A Notice with your IP PIN.
If you live in one of 20 locations, you are eligible for the online IP PIN Opt-In Program. To be eligible for 2020, you must have filed a federal return last year as a resident of Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Texas or Washington.
But, the IRS is expanding eligibility for the IP PIN Opt-In Program. States are being added in phases until the program moves nationwide. See Publication 5367, the IP PIN Opt-In Program for Taxpayers (PDF, in English and Spanish) PDF, for details on the program.
You can access the IRS Website here: https://www.irs.gov/identity-theft-central.
A new transcript format is now in place to better protect your information from identity theft. Transcripts are often used by taxpayers, tax preparers and third parties (i.e. lenders) to review and confirm tax information. This new transcript partially masks the personally identifiable information of everyone listed on the tax return. All financial entries will remain fully visible to assist with tax preparation, tax representation and income verification.
Here is what is visible on the new tax transcript:
Last four digits of any SSN listed on the transcript: XXX-XX-1234
Last four digits of any EIN listed on the transcript: XX-XXX1234
Last four digits of any account or telephone number
First four characters of the last name for any individual (first three characters if the last name has only four letters)
First four characters of a business name
First six characters of the street address, including spaces
All money amounts, including wage and income, balance due, interest and penalties
This has been in place for individual tax returns. To protect business taxpayers from identity theft, the IRS announced that starting Dec. 13, it will begin masking sensitive data on business tax transcripts. The announcement provides 30 days for stakeholders to make any adjustments. The IRS began informing tax professionals of this change during the 2020 Nationwide Tax Forums this summer. The IRS previously masked sensitive data on individual tax transcripts two years ago.
More information about the masking of transcripts can be found at IRS.gov’s e-Services page after Dec. 13.
CATCH THE BULLCAST PODCAST
Our colleagues at Pickler Wealth Advisors are publishing a weekly podcast on financial information, including taxes. The November 12th edition was on Identity Theft. Catch hosts Katie Pickler and Cort Winsett offering a humorous and entertaining and informative podcast. You can subscribe or catch individual episodes at: https://www.bullcastpodcast.com. Also look for upcoming PAA Tax blogs and BullCast episodes on important tax and financial information.