In this article we will discuss a common and often misunderstood IRS procedure, the taxpayer protection program, otherwise known simply as ID authentication.

Many people mistakenly assume that if their tax return is selected for ID verification, it means that there was something wrong with their tax return. The truth is that the IRS select returns at random for ID verification. It is important to know that taxpayers who have a US driver’s license should include its details in the designated section of the tax return to avoid being selected for ID verification. This is not foolproof, but acts like an automatic ID verification which usually prevents the full verification.

Any change of filing status acts as a trigger for ID verification. Therefore, someone who files married filing jointly for a number of years, and then changes and files separately are very likely to be selected for ID verification. Usually, if one spouse is requesting a refund, it will be that spouse that needs to verify their ID. It should be noted that the IRS rarely selects returns for verification if no refund was requested.

A person is notified that their return was selected for ID verification by a letter. For citizens who live abroad, the letter number is 5447c. It includes very clear instructions on how to go about verifying one’s ID. One simply needs to call the IRS at the number provided and answer the questions asked in order to verify the ID. It is imperative to have on hand a copy of the tax return for the year in question and one prior year that has been processed. For example, if 2019 is being verified, one would need to have a copy of the 2019 and 2018 returns on hand when calling. If, however, two years are being verified, one would need the last year that was actually processed as well as all the years being authenticated.

The IRS will ask you basic questions on the tax return, as well as personal questions. The call can be done by a certified accountant to whom power of attorney has been granted. 

Sometimes, the call is not enough to verify the ID. This is always the case when it is the first year filed. First year filers are often selected for verification. At other times, the IRS will not allow the verification by phone if the questions are not answered correctly, or if the IRS do not have enough income information on file, which can sometimes happen with US citizens reporting foreign wages. This is why it is important to explain to the IRS that one’s wages are foreign if they begin to question their reliability. 

In all the above cases, the ID can be verified by sending in the documents listed on the letter to the address written at the top of the letter. During the last few months since the Covid-19 outbreak a designated fax line was created for sending in ID verification documents. Additionally, the IRS have agreed to authenticate the ID of taxpayers who did not receive the letter notifying them of the need to process the verification. This is because the IRS was closed and not sending out letters for a few months during the Covid-19 pandemic. However, the IRS are starting to reinstate their usual policy where one must have the letter on hand to be able to complete the process.

It is important to note that if one delays too much in verifying their ID, the IRS moves their return off the system and it is then very difficult to retrieve.

Once the ID is successfully verified, the return is sent for processing.

To conclude, the ID verification process is simple and straightforward, and can be completed with ease by any English-speaking taxpayer, or CPA.