In a strategic move to combat the rising menace of tax-related identity theft, the Internal Revenue Service (IRS) joined forces with state agencies and the nation’s tax professionals and technology providers under the banner of the Security Summit. Their recent campaign, “Protect Your Clients; Protect Yourself,” marked the eighth such effort to raise awareness about the critical need to safeguard the data security of tax practitioners and their clients.
Key Warning Signs Highlighted: IRS Online Account Creation Without Consent, Unexplained Tax Transcripts, and More
This year’s campaign emphasized crucial warning signs that tax professionals should watch out for in their practices:
- Creation of an IRS online account for a taxpayer without their consent.
- IRS deactivating a client’s online account.
- Clients are receiving unrequested tax transcripts.
- IRS notices, including balances due, do not match filed tax returns.
- Clients receive refunds without filing a tax return.
- Tax returns are being rejected due to the Social Security number already being used on another return.
Protective Measures Urged for Tax Preparers: Immediate Reporting and Identity Protection
As part of the ongoing efforts, tax preparers were reminded to secure their systems to prevent unauthorized access to private client information. In the unfortunate event of a theft, immediate notification to the IRS, insurance companies, and cybersecurity experts was strongly advised to determine the cause and extent of the theft.
Advice for Clients: Consider Identity Protection PIN and Form 14039
Should clients fall victim to potential harm, tax professionals recommended obtaining an Identity Protection Personal Identification Number (IP PIN) and filing Form 14039, Identity Theft Affidavit, if necessary. The IP PIN serves as an additional layer of authentication to validate taxpayers’ identities, and taxpayers can proactively request it through the IRS’s online “Get an IP PIN” tool.
IRS Publications Offer Guidance for Tax Preparers
To equip tax preparers with essential guidance on security measures, the IRS highlighted key publications:
- Publication 5293: Data Security Resource Guide for Tax Professionals.
- Publication 4557: Safeguarding Taxpayer Data.
- Publication 5708: Creating a Written Information Security Plan for Your Tax & Accounting Practice.
Audit Reveals IRS Success in Combating Identity Theft: Millions Saved in Fraudulent Refunds
In a recent audit by the Treasury Inspector General for Tax Administration (TIGTA), positive strides were noted in the IRS’s efforts against tax-related identity theft during the 2023 income tax return filing season. TIGTA reported that the IRS used 236 filters to identify potential identity theft tax returns, preventing fraudulent refunds. Approximately $105.3 million in fraudulent refunds were saved as a result, marking a significant increase from the 2022 filing season.
This comprehensive approach by the IRS and its Security Summit partners underscores their commitment to fortifying the defenses against identity theft, ensuring the protection of taxpayers and tax professionals alike.
Source ( Journal of Accountancy News).
