As a tax preparer, you are an attractive target for identity thieves. Sensitive financial information, combined with the private details you collect as part of your job, makes you a prime candidate for this crime. It’s especially important to protect yourself and your clients from the dangers of tax identity theft. To help protect yourself and your clients from these threats, we thought it would be useful to put together a brief list of tips to help deal with this problem. If this is something that you’re interested in learning more about, read on for four effective tips that will help protect taxpayers from identity theft.
Have a Data Security Plan
Did you know the IRS recommends that tax preparation businesses hire an in-house or outside consultant to create a cybersecurity plan? But, if that’s not in your budget, read IRS Publication 4557 to understand the details of creating your business’s cybersecurity plan. These are a few key points from that publication.
Follow Data Protection Best Practices
Basic data protection best practices include using a password manager that generates and manages passwords across all devices, installing an anti-malware program on all computers, encrypting sensitive files and emails with a strong passphrase, and wiping old computers that contain client information before you sell or donate them.
Inform Yourself on Scams
Data breaches occur frequently as a result of phishing emails. So it’s important that you and all of your employees know how to identify phishing emails and how to avoid them. Most phishing emails target tax preparers, so they will pose as the IRS in emails to scammers.
Always check the domain in the email address and be suspicious of any messages that feel urgent or demand that you take action now, or make requests of you that seem weird. For instance, a common form of phishing scam involves a stranger sending you an urgent request for help because their emails are being hacked, which suggests that if you do not act now, you will lose your account or face legal consequences. Installing malware protection on your computer provides protection against downloading any malicious software that might be attached to emails like these.
Monitor Your EFIN and PTIN Activity
Identity thieves might target your EFIN or PTIN numbers and use them to file fraudulent returns. If you receive daily acknowledgments for returns you file, and the IRS posts weekly reports listing the e-filing numbers for every PTIN, you can catch this type of fraud early. If your practice files more than 50 returns per year, you can also access weekly reports of PTIN filings through the IRS website. Contact the IRS e-help desk immediately if the number of returns in their reports never matches up to the actual number of returns your practice has filed.
Conclusion
We hope this article proves to be useful when it comes to bolstering your defenses against identity theft. While this may seem like a lot of work, you’ll want to do all you can to keep your and your client’s data safe from potential threats. Be sure to keep everything you learned here in mind to minimize the risk of falling prey to identity theft schemes.
If you’re looking for professional tax preparation software to streamline and optimize your processes, our products at Keystone Tax Solutions are just what you need. Get in touch with us to begin your free demo today!
