Tax Season Fraud Alert: Critical Information About New IP PIN Schemes

As we enter the 2025 tax season, our monitoring team has identified an alarming surge in tax-related fraud schemes. Criminals are becoming increasingly sophisticated in their methods, particularly in exploiting the IRS's Identity Protection PIN system to perpetrate complex tax fraud operations.

The average time to detect tax-related identity theft is 6 months, by which point criminals have often already exploited the stolen information extensively. The IRS reports that sophisticated IP PIN schemes have become the fastest-growing vector for tax fraud.

These fraudsters have developed a multi-step approach:

• First, they acquire stolen personal information from data breaches or through social engineering
• Next, they identify individuals who haven't yet created their IRS online accounts
• Finally, they use the stolen information to create fraudulent IRS accounts and obtain IP PINs

Once armed with these IP PINs, criminals can file fraudulent tax returns that appear completely legitimate to the IRS system. The scheme is particularly dangerous because it transforms a security measure designed to protect taxpayers into a vulnerability that can be exploited by sophisticated criminal networks.

What makes this trend especially concerning is the timing - fraudsters often file fake returns early in the tax season, before legitimate taxpayers have had a chance to file their returns. This can result in rejected legitimate returns and months of complicated resolution processes with the IRS.

Criminal syndicates are increasingly targeting tax professionals and preparers to gain access to multiple taxpayers' information simultaneously. These breaches often go undetected for weeks or months, allowing criminals to compile comprehensive datasets for future fraud attempts. The average financial impact of tax-related identity theft now exceeds $12,000 per victim.

Stay vigilant by following these essential steps:

• Setting up your IRS account immediately
• Implementing robust protection measures for your personal information, including using strong passwords and secure storage methods
• Exercising extreme caution with unsolicited tax preparation services, especially those offering "too good to be true" deals
• Regularly monitoring your credit reports for any signs of suspicious activity
• Filing your tax returns as early as possible to prevent fraudsters from filing first

About Finovifi

At Finovifi, we're committed to protecting our clients from these emerging threats. Our advanced monitoring systems continuously scan for compromised personal information and suspicious activity patterns. We offer real-time alerts and dedicated support to help you navigate potential security concerns. Contact our team today to learn more about how we can help.