The IRS Insists Tax Professionals Stay Vigilant Against Identity Theft and Tax Fraud

The IRS insists tax professionals nationwide stay vigilant against identity theft and tax fraud. This alert is part of the “Protect Your Clients; Protect Yourself” campaign, launched earlier this July in collaboration with the Security Summit partners. This initiative safeguards sensitive taxpayer data and reinforces tax professionals’ defenses against ever-evolving cyber threats. 

Unlocking the Danger of Security Threats

Cybercriminals are constantly developing new and advanced scams, posing a serious threat to tax professionals of all scales, from large accounting firms to solo practitioners. In the past few months alone, nearly 200 data incidents have been reported to the IRS, potentially impacting up to 180,000 clients. This underscores the urgent need for robust security measures to safeguard client information and the professionals responsible.

Security Summit’s Role in Identity Theft

Since 2015, the Security Summit, a coalition of the IRS, state tax agencies, and the tax community, has diligently worked to combat tax-related identity theft and fraud. This year, the Summit focuses on providing vital information on protecting taxpayer data information. These updates will coincide with the IRS Nationwide Tax Forum, held in five U.S. cities, including Chicago, Orlando, Baltimore, Dallas, and San Diego.

Taxes-Security-Together Checklist created by Security Summit

It is essential to prioritize security measures to protect your clients’ data. Cybercriminals frequently target tax practitioners of all sizes to steal sensitive tax information. By being proactive, regardless of the size of your practice, you can protect your clients and your business, which will help you stay in control.

 The IRS, state tax agencies, and industry partners have collaborated to create a Taxes-Security-Together Checklist to support you in this effort. This checklist serves as a guide to help you effectively implement essential cybersecurity measures. 

• Deploy the “Security Six” measures: Deploy the “Security Six” measures by activating anti-virus software, using a firewall, opting for two-factor authentication, utilizing backup software/services, employing drive encryption, and creating secure Virtual Private Networks.
• Create a Data Security Plan: Federal law requires you to uphold an information security plan for your client data. This requirement suits tax professionals of any size, from small to large. You are asked to focus on critical areas like employee management and training, information systems, and detecting and managing system failures.
• Educate yourself on phishing scams: Learn about spear phishing emails, and beware of ransomware to protect against cyber threats effectively.
• Create a data theft recovery plan: Create a comprehensive recovery plan that includes immediate contact with a local IRS stakeholder liaison, assisting the IRS to protect clients, and contracting with a cybersecurity expert to stop further thefts.
• Recognize Signs of Client Data Theft: Be vigilant for signs such as clients receiving IRS letters about suspicious tax returns, more returns filed under your Electronic Filing Identification Number than submitted, and clients receiving unrequested tax transcripts.

By following the Taxes-Security-Together Checklist, you can ensure that you take the necessary steps to protect sensitive information and maintain your clients’ trust.

The Bottom Line

TaxBandits’ comprehensive application is crucial in supporting tax professionals’ security efforts. We offer robust security features aligning with the “Security Six” measures of the Security Summit Checklist. We also provide unique features to assist tax professionals in meeting IRS requirements and upholding the highest data protection standards. 

• BanditConnect for Secure Collaboration: The BanditConnect feature in TaxBandits allows CPAs and their clients to share information and collaborate smoothly. It ensures secure data exchange and protects sensitive information through strong security measures. This feature promotes trust and confidentiality, streamlining communication and data management to make the tax filing process more efficient and secure.

• Enhanced Security with Two-Factor Authentication (2FA): TaxBandits boosts security by implementing two-factor authentication (2FA). CPAs can verify their accounts through multiple methods, such as email codes, authentication apps (like Google Authenticator, Microsoft Authenticator, Authy by Twilio, and LastPass by Go To), and recovery codes. Additionally, TaxBandits offers a “Remember a Device” feature, allowing CPAs to skip 2FA on trusted devices for a set period, balancing convenience with security.

• SOC-2 Certified Provider with Industry-leading Data Security: As a SOC-2 certified provider, TaxBandits is committed to high-level data security. This certification shows their dedication to protecting sensitive information, like Personally Identifiable Information (PII) and Social Security Numbers (SSNs), through rigorous security measures. By following SOC-2 standards, TaxBandits ensures that client data is safe from unauthorized access, providing peace of mind for CPAs and their clients.

By partnering with TaxBandits, you can strengthen your security defenses, streamline tax filing processes, and ensure tax compliance with federal regulations. Together, we can reinforce defenses against identity theft and tax fraud, safeguard client information, and maintain trust in tax compliance practices.

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