IRS Tax Professional Data Theft Attacks

Due to the increase in cybercriminal attacks on tax professionals during 2018 the IRS is urging practitioners to take steps to protect their computer networks.

This increase represents a significant trend in tax-related identity theft, and it is a sign that tax practitioners must take stronger measures to safeguard their clients and their business.

The IRS also reminds all professional tax preparers that they are required by federal law to create and maintain a written data security plan. Sole practitioners are just as vulnerable to data theft as practitioners in large firms.

Here are some common clues that data theft has occurred:

• Client e-filed returns begin to reject because returns with their Social Security numbers were already filed;
• Clients who haven’t filed tax returns begin to receive authentication letters (5071C, 4883C, 5747C) from the IRS;
• Clients who haven’t filed tax returns receive refunds; 
• Clients receive tax transcripts that they did not request;
• The number of returns filed with tax practitioner’s Electronic Filing Identification Number (EFIN) exceeds number of clients;
• Network computers running slower than normal;
• Computer cursors moving or changing numbers without touching the keyboard

See IRS News Release of December 7 - IRS, Security Summit Partners warn tax professionals of high risk of data theft attacks for more information on the increase of these attacks and on what basic security steps tax preparers should take to protect themselves.