IRS Warns of New Wave of Cyber Attacks that Aim to Take Over Tax Preparers Computers

The IRS has posted a news release (IR-2016-119) to warn tax preparers of a new wave of attacks that allow identity thieves to file fraudulent tax returns by remotely taking over a tax preparer’s computer system.

These cyber-attacks are taking place using remote technology which allows the identity thieves to gain access to a tax preparer’s computer system, access client data, complete and e-file tax returns, then direct the refunds to the criminal’s own bank accounts. The IRS is aware of approximately two dozen cases where tax preparers have recently been victimized.

The victims learned of these thefts while they were reconciling their e-file acknowledgements.

See IRS News Release IR-2016-119 (dated September 2, 2016) for more details on these attacks and what measures tax preparers should take to protect their computer systems.

Also see the IRS Protect Your Clients; Protect Yourself webpage for more information how preparers can help fight identity theft and protect their customer tax return data and their computer systems.

IRS, Industry, and State Security Summit and Collaborative Effort to Fight Identity Theft

The IRS joined with representatives of the tax software industry and state tax administrators on June 11, 2015 to announce the new collaborative effort to help protect the nation’s taxpayers from identity theft and tax fraud.

CrossLink has been part of this effort for the past three months and looks forward to being part of the continuing partnership with other tax industry companies, the IRS, and states in the months ahead to help combat the growing impact of identity theft to the federal and state tax systems.

This effort began in March 2015 with the establishment of three teams that focused on developing ways to improve tax return authentication and validation, information sharing between the industry, IRS, and states, and fraud detection and assessment of risks in order to develop strategies in preventing emerging threats.

The members of the IRS Security Summit agreed to several new initiatives in the following areas:

• Taxpayer authentication - Industry and government groups identified numerous new data elements that can be included with the return to help authenticate the taxpayer and detect identity theft fraud.
• Fraud detection - An agreement was made to expand the sharing of fraud leads between industry and government.
• Information assessment - The groups will look at establishing a formalized Refund Fraud Information and Assessment Center to more efficiently share information between the public and private sector to help identify fraud schemes and reduce the risk to taxpayers.
• Cyber-security framework - Industry agreed to align with the IRS and states under the National Institute of Standards and Technology cyber-security framework to promote the protection of the information technology infrastructure.
• Taxpayer awareness and communication - A joint effort between the IRS, states, and industry to increase the effort to inform taxpayers and raise awareness of the importance of protecting taxpayers’ sensitive personal tax and financial data to help prevent identity theft and refund fraud.

To learn more about this new IRS, industry, and state collaborative effort to fight identity theft and protect taxpayers, see the following on the IRS website:

• IRS news release on IRS, Industry, and State Security Summit
• 2015 IRS Security Summit Report
• IRS Security Summit page

IRS Security Summit Working Group Kick-Off Meeting

The tax software industry, IRS, and state tax administrators will be holding their kick-off meeting to discuss ways to address identity theft, refund fraud, and data security on April 2, 2015 in Washington, D.C. The goal of these working groups is to collaborate on finding solutions that will help mitigate identity theft in the tax system.

Petz Enterprises is glad to be part of this discussion and happy that IRS Commissioner Koskinen is making identity theft a priority.

Our goal has been, and will continue to be, bringing whatever resources are necessary to help combat tax related identity theft. By working with the IRS and state tax agencies, we will continue to be at the forefront of this issue.

Our customers have benefited from the security features that we have included in our product to help protect them from this very serious problem, and we will continue to look at adding more in the future.

We are looking forward to working with the IRS, State governments, and other members of the tax industry to help address the issue of identity theft and security in these working groups over the next few months.

Update on IRS Identity Theft Crackdown

The IRS, in conjunction with the Justice Department and other Federal, state, and local agencies, has intensified their efforts at preventing, detecting, and resolving identity theft and refund fraud. Read more

The identity theft and refund fraud effort has involved 734 enforcement actions in January involving 389 individuals. The effort included 109 arrests, 189 indictments and complaints, and 47 search warrants. Read more

In addition, the IRS began a special compliance effort that began on January 28, 2013. IRS auditors and criminal investigators will visit 197 money service businesses to help make sure that these businesses are not assisting identity thieves or refund fraud when cashing checks. These compliance visits took place in 17 high-risk areas identified by the IRS which included: New York, Philadelphia, Atlanta, Tampa, Miami, Chicago, Houston, Phoenix, Los Angeles, San Diego, El Paso, Tucson, Birmingham, Detroit, San Francisco, Oakland, and San Jose. Read more

Click here to read the entire CrossLink Tax Update about the IRS identity theft crackdown.