igualdad 2021
Tax & AccountingSeptember 14, 2022

Tax Pros and their clients increasingly are identity-theft targets: 5 tips to avoid scams

Staying ahead of identity thieves is a constant battle. They are tech and tax savvy and view tax pros as good targets. Using an array of tactics, some simple, others sophisticated, they can obtain a client's private data or hack into a tax pro's computer system to access this information. This stolen data is often used to file fraudulent tax returns.

The Internal Revenue Service recommends the following actions tax pros can take to protect their computer systems and their client data from falling into the wrong hands:

Create a security plan.

Under federal law, paid tax return preparers must have a data security plan. This plan protects the business and client information while providing a blueprint for action in the event of a security breach. Knowing where to start when developing a written security plan presents challenges for many tax pros. See IRS Publication 4557 for help.

Encourage clients to apply for an Identity Protection PIN

The IRS now offers IP PINs to all taxpayers who can verify their identities online, on the phone with an IRS employee after filing Form 15227, or in person.

The IP PIN is a six-digit number known only to the taxpayer and the IRS. It helps prevent an identity thief from filing a fraudulent return in the taxpayer's name.

Tax pros can't obtain an IP PIN for their clients; clients must verify their identities with the IRS. The easiest way is at the get an IP PIN tool on IRS.gov.

Avoid spear phishing scams

One of identity thieves' most successful tactics against tax professionals is a spear phishing scam. These personalized emails sometimes entice tax pros to open a link embedded in the email or open an attachment.

Tax pros have been especially vulnerable to spear phishing from individuals posing as potential clients. Thieves might carry on an email conversation with their target for several days before sending the email containing a link or attachment. Meanwhile, the link or attachment may secretly download software onto tax pros' computers, giving the thieves remote access to their systems.

Know the tell-tale signs of identity theft

Many tax pros who report data theft to the IRS are often unaware of the signs of theft. There are many signs that tax pros should watch for. These include:

  • Multiple clients suddenly receiving IRS letters requesting confirmation that they filed a tax return deemed suspicious
  • Receiving e-File acknowledgments for far more tax returns than they filed.
  • Cursors seeming to move on their own, in the case of computer hacking

Help clients protect themselves whether working from home or traveling

With the continuation of work-from-home policies for many organizations, taxpayers are doing more and more electronically. Tax pros can help their clients protect themselves by sharing information on computer security. These cyber-smart tactics protect not only the tax pro but also their clients.

The IRS has a central resource for tax pros and taxpayers to further help in identifying and protecting against identity theft and cyber-attacks, called identity theft central

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Mark Friedlich
Vice President of US Affairs for Wolters Kluwer Tax & Accounting
Mark Friedlich, a CPA & tax lawyer, is the Vice President of US Affairs for Wolters Kluwer Tax & Accounting. He is a member of the U.S. Senate Finance Committee’s Chief Tax Counsel’s Advisory Board, advisor to 14 state taxing authorities, and has been a member of the American Bar Association’s Tax Section and AICPA’s Tax Section leadership teams. Prior to joining Wolters Kluwer he was a COO and Principal at PwC.


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