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Taxes Security Checklist - Protect Your Clients; Protect Yourself
"Protect Your Clients; Protect Yourself", focuses on a reminder for tax pros to focus on fundamentals and to watch out for emerging vulnerabilities being seen for those practitioners using cloud-based services for their practice.
Identity thieves were especially active this past year as they continued to use the pandemic, nationwide teleworking practices, and other events as predatory tactics for a variety of scams.
Tax professionals are prime targets of criminal syndicates that are both tech- and tax-savvy and well-funded. These scammers either trick or hack their way into tax professionals' computer systems to access client data. Even when tax pros think they have client data stored in a secure cloud, lack of strong authentication can make this information vulnerable.
Takeaways from the 2022 Summer IRS Security Summit
5 Tips for Avoiding Tax Related Identity Theft
The IRS Security Summit is emphasizing the following steps that tax professionals should do to help prevent identity thieves from stealing their clients’ data and their clients’ from becoming a victim of identity theft.
Sign up clients for Identity Protection PINs (IP PIN)
The IP PIN serves as a critical defense against identity thieves. Now that anyone can opt to get an IP PIN, tax preparers should inform their clients about the IRS Identity Theft Protection PIN Opt-In Program and encourage their clients to sign up for one.
See IRS News Release I.R. 2022-140 (Identity Protection PINS provide an important defense against tax-related identity theft) for how individuals can sign up and the benefits for having an IP PIN.
Email Spear Phishing Scams
The Security Summit partners continue to see instances where tax preparers have been vulnerable to identity theft phishing emails that pose as potential clients. The identity thieves use these emails to trick the preparer into opening email links or attachments that allow them to infect their computer systems and potentially steal client information.
The Security Summit also warns tax preparers using cloud-based systems to prepare and store tax returns to make sure that they are using multi-factor authentication that use options such as phone, text, or tokens.
See IRS News Release I.R. 2022-143 (Security Summit warns tax pros of evolving email and cloud-based schemes to steal taxpayer data) on the IRS website for more information on the latest spear phishing schemes and the advantages of using multi-factor authentication.
Know the Tell-tale Signs of Identity Theft
A common concern that the IRS hears from tax preparers is that they did not immediately recognize the signs of data theft.
Security Summit partners urge tax preparers to learn the signs of data theft so that they can react quickly to protect their clients and themselves.
Here are critical signs that data theft may have occurred:
- A client’s tax return is rejected because their SSN was already used on another return
- IRS records show more e-File acknowledgements received than the tax preparer has filed
- A client has responded to an email from the tax preparer that the tax preparer did not send
- Slow or unexpected computer and/or network issues
Create a Security Plan
The Security Summit partners have created a new sample security plan designed to help tax professionals, especially those with smaller practices, protect their data and information.
As a reminder, federal law requires all tax preparers to create and implement a data security plan. The Security Summit (a private public partnership between the IRS, states, and tax industry) has noticed that a number of tax professionals are struggling to develop a written security plan.
The new sample security plan, Creating a Written Information Security Plan for Your Tax & Accounting Practice, is a 29-page document that is designed to help tax preparers of all sizes to create a written security plan.
See IRS News Release I.R. 2022-147 (Security Summit releases new data security plan to help tax professionals) for more information on this new sample security plan and additional resources available to help tax preparers with securing their computer systems in their office.
Protection for Remote Workers
With many people working from home, the IRS and Security Summit partners urge individuals to use a virtual private network (VPN) to securely conduct business.
See IRS News Release I.R. 2022-151 (Tax pros can help clients battle identity theft risk) for what individuals should consider when conducting business online.
Additional Security Summit Resources
See the following on the IRS website for more information on the IRS Security Summit and this summer’s Protect Your Clients; Protect Yourself – Summer 2022 awareness campaign:
IRS Independent Office of Appeals’ priorities for 2023 focus on taxpayer service
The IRS Independent Office of Appeals released its focus guide PDF for fiscal year 2023. Appeals is taking important steps to expand communications with external stakeholders and to improve taxpayer access to Appeals. Promoting transparency and taxpayer access helps Appeals fulfill its mission to resolve tax disputes in a fair and impartial manner without the need for litigation.
The focus guide outlines the taxpayer service initiatives you can expect over the coming year, including:
- Increasing stakeholder outreach – including to historically marginalized and limited English proficient communities—about the appeals process.
- Improving access to in-person and video conferences and revising letters and notices to ensure taxpayers understand that it is generally their choice how to meet with Appeals.
- Leveraging technology to improve how Appeals works and manages its cases.
- Continuing the Practitioner Perspectives series in which tax practitioners share insights and feedback with Appeals employees. Recordings of prior panel discussions on Collection Appeals and Examination Appeals are available.
- Developing training for Appeals employees on enhancing customer engagement. Learn more.
IRS releases FY2022 annual report highlighting more than 2,550 investigations
In fiscal year 2022, IRS Criminal Investigation initiated more than 2,550 criminal investigations, identified over $31 billion from tax and financial crimes, and obtained a 90.6% conviction rate on cases accepted for prosecution. The IRS-CI FY22 Annual Report PDF, released Thursday, details these statistics, as well as important partnerships and significant criminal enforcement actions from the past fiscal year, which began October 1, 2021, and ended September 30, 2022.
"The cases the IRS-CI team investigated over the past fiscal year touch multiple continents and require cooperation with partners around the globe. This is why IRS-CI continues to cement itself as the preeminent law enforcement agency investigating financial crimes on a global scale," said IRS Commissioner Chuck Rettig. Learn more.
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