For American taxpayers who plan to file their returns early, the Internal Revenue Service (IRS) has urged them to establish an extra layer of security - the Identity Protection Personal Identification Number (IP PIN). The IP PIN request system will undergo scheduled maintenance from this Saturday and will be offline until early 2025. An IP PIN, comprising six digits, shields taxpayers from fraudulent activities like having someone else submit a federal tax return using their Social Security Number or Taxpayer Identification Number.
According to the IRS plans in 2025, it will permit electronic filing of tax returns from individuals who lay claim to dependents, already claimed on another person’s return. This scheme is only applicable to the second applicant if they possess an IP PIN. This arrangement is expected to simplify the filing procedure for millions of Americans who claim the Earned Income Tax Credit or Child Tax Credit each year.
In previous tax seasons, the secondary filer's returns were required to be hand delivered to the IRS. For this tax year, e-filed returns from taxpayers without an IP PIN that claim a dependent already claimed by others will be rejected. This will further delay any possible refunds they are entitled to.
For taxpayers filing later in the season, they could wait for the IP PIN system to resume activity to avoid delays. It usually takes about four to six weeks to receive an IP PIN. However, there are several advantages to filing early, the primary one being accelerated refunds. The IRS traditionally initiates the tax season by processing tax returns starting from January.