Protecting Employee Information: IRS Tools and Multi-Factor Authentication

The IRS and the Security Summit recently reminded organizations that strong identity verification tools, such as multi-factor authentication (MFA) and IRS-provided protections, can help reduce the risk of tax-related identity theft. While these messages are aimed at tax professionals, the recommendations are useful for any HR team responsible for safeguarding sensitive employee information.

Multi-Factor Authentication – Not Just for Tax Preparers

MFA adds an extra step to logging into a system by requiring at least two of the following:

• Something you know (like a password)
• Something you have (like a code sent to your phone)
• Something unique to you (like a fingerprint)

Using MFA makes it much harder for a criminal to gain access to accounts, even if they’ve stolen a password. Under federal rules, MFA is a requirement for companies that handle sensitive personal information, regardless of size. HR systems containing payroll, benefits, or tax data should have MFA enabled wherever possible.

IRS Identity Protection PINs

An IRS Identity Protection PIN (IP PIN) is a six-digit number that helps protect an individual’s tax return from being filed fraudulently. Any employee can opt in to receive one.
Key points for HR to share with employees:

• The IP PIN changes annually and should be kept confidential.
• The IRS will never call, email, or text to request an IP PIN.
• Employees can get their own IP PIN through the IRS website after verifying their identity.

IRS Online Account

Encourage employees to set up an IRS Online Account. This helps them:

• Securely access their tax account information
• Prevent criminals from creating a fraudulent account in their name
• Share tax information securely with a preparer if needed

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Why HR Should Care

Tax-related identity theft often begins with stolen personal data. By promoting MFA use, sharing information about IP PINs, and encouraging secure IRS Online Account creation, HR can help employees reduce their exposure to fraud. These measures also protect employers by reducing the risk of payroll or benefits system compromise.