9/8/2021
All tax professionals should learn the signs of data theft so they can react quickly to protect clients. During this summer’s campaign Boost Security Immunity: Fight Against Identity Theft, the IRS and its Security Summit partners reminded tax professionals to contact the IRS immediately when they have an identity theft issue. They should also contact their insurance or cybersecurity experts to assist them with determining the cause and the extent of the loss.
Critical Signs of Data Theft:
Client e-filed returns rejected because their Social Security number was already used on another return.
More e-file acknowledgements received than returns they filed.
Clients responded to emails the tax pro didn't send.
Slow or unusual computer or network responsiveness such as: software or actions taking longer to process than usual, the computer cursor moving or changing numbers without the mouse or keyboard being touched, or being locked out of the network or computer.
Warning Signs Clients May Report That They Received:
IRS Authentication letters 5071C, 4883C, 5747C even though they haven't filed a return.
A refund even though they haven't filed a return.
A tax transcript they didn't request.
Emails or calls from the tax professionals that they didn't initiate.
A notice that someone created an IRS online account for them without their consent.
A notice they weren't expecting that someone accessed or disabled their IRS online account.
If Tax Professionals or Their Firm Think They Are Victims of Data Theft, They Should Immediately:
Report the theft to their local IRS Stakeholder Liaison, who will notify IRS Criminal Investigation and others within the agency on their behalf. Speed is crucial; if reported quickly, the IRS can take steps to block fraudulent returns in the clients' names and assist tax professionals through the process.
Email the Federation of Tax Administrators at statealert@taxadmin.org to get information on how to report the information to their state. Most states require the state attorney general to be notified of data breaches, which may involve multiple offices.
These are just a few common examples. Tax professionals should make sure they have the highest security possible.
Resources: Data Theft Information for Tax Professionals Publication 4557, Safeguarding Taxpayer Data Small Business Information Security: The Fundamentals Boost Security Immunity: Fight Against Identity Theft