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Do Social Security Numbers Need To Be Used

Thursday, July 30, 2015

In order to combat the increasing occurrences of identity theft and tax fraud, the IRS is identifying different ways to find a solution. One such way is to review the use of Social Security numbers in recent hackings.  What if a solution would be for all taxpayers to have a personal identification numbers or an Identity Protection Number (PIN) that was six digits long?  The IRS is piloting a program in three states in the U.S. (Florida, Georgia and Washington, D.C.) to determine what it would be like if taxpayers used a PIN.  These areas were chosen for the pilot project since they experience higher rates of cyber tax fraud. Another option could be for taxpayers to use a number for purposes of filing taxes only.  This is what some countries in Europe are doing.


In the last few years, the IRS has issued approximately $5.8 billion in fraudulent income tax refunds.  That’s no chump change.  And identity thieves are getting smarter and more sophisticated at what they are doing.


Perhaps, if there was a taxpayer identification number solution, then cyber security breaches would not be as significant since they would not involve Social Security numbers.  If this was the case, then one of the largest schemes in IRS history that happened last month that had over 100,000 taxpayer's information stolen right off the IRS website maybe wouldn’t have mattered.  Then, there would be no scams to cheat the IRS out of $50 million in tax refunds using stolen Social Security numbers.  Could it be so simple?  In that hacking scheme, the identity thieves were able to steal information which included information about past refunds, income, loans, dependents, etc.  Even though for this specific breach, the thieves previously had identifying information that they used to access tax information on the IRS website. This included Social Security numbers as well as other information that a taxpayer would use to verify their identity.  It is doubtful that the hackers used a taxpayer’s personal six-digit PINs. 


Victims of identity-theft are issued PINs.  The new pilot program let taxpayers in the program to use a PIN to protect them from cyber tax fraud.  When a taxpayer chooses to a six-digit PIN, it would be used on their tax return.  A Social Security number would still need to be used as well.  A taxpayer would receive their PIN each year before the tax filing season begins.  A new PIN would be issued each year.

Taxpayer will need to use a PIN for future year filings if they opt into the program.  This is being seen as a real possibility to fight identity theft and tax fraud.


The Strategic Tax Lawyers are staffed with credible tax attorneys and attorneys dealing with amnesty and tax relief.  The firm has documented years of experience winning cases and negotiating with the opposing side.  Clients always receive the best results with the Strategic Tax Lawyers on their side. Call the Strategic Tax Lawyers at (800) 669-4775 for a free case consultation.