IRS Introduces Changes to Reduce Refund Delays, Combat Identity Theft

The Internal Revenue Service (IRS) in Washington, on Aug. 12, 2024. Madalina Vasiliu/The Epoch Times

The Internal Revenue Service (IRS) has announced new measures aimed at reducing refund delays for some taxpayers while also strengthening protections against identity theft and fraud.

Starting in the 2025 filing season, taxpayers who file electronically can submit returns claiming dependents, even if those dependents have already been claimed on another return, as long as they include a valid Identity Protection Personal Identification Number (IP PIN), the IRS said in a Nov. 21 announcement.

The changes apply broadly to all taxpayers with duplicate dependent claims, not just those claiming the Earned Income Tax Credit or Child Tax Credit. The IRS said it will now accept electronic filings of Forms 1040, 1040-NR, and 1040-SS in these cases, eliminating the need for paper filing, which previously caused significant delays in processing refunds.

“This change will reduce the time for the agency to receive the tax return and accelerate the issuance of tax refunds for those with duplicate dependent returns,” the IRS said in its announcement. The agency added that this update will streamline the process for taxpayers and provide faster resolutions while safeguarding against fraudulent filings.

An IP PIN is a six-digit number issued by the IRS to confirm a filer’s identity and prevent unauthorized use of their Social Security number or Individual Taxpayer Identification Number. It ensures that only the taxpayer, or someone authorized by them, can file a return using their identifying information.

The IRS emphasized in its announcement that requiring an IP PIN for duplicate dependent claims helps address fraud and errors, whether caused by intentional misuse or honest mistakes. This added layer of protection can prevent identity thieves from fraudulently claiming refunds or dependents using stolen information.

In its announcement, the IRS also encouraged taxpayers to sign up for an IP PIN before Nov. 23, as the system will be offline after that date for annual maintenance until early January 2025.

Taxpayers can register for an IP PIN through their IRS Online Account, which also provides access to past tax records, including W-2 and 1099 forms. For those unable to use the online system, alternatives such as paper applications or in-person authentication at a local Taxpayer Assistance Center are available.

The updated rules on e-filing with an IP PIN affect tax year 2024 and beyond. Duplicate dependent claims for prior years, such as 2022 and 2023, must still be filed on paper. Also, the IRS clarified that the IP PIN requirement applies only to the primary filer on the returns, with dependents and spouses not needing separate PINs.