As data theft becomes an increasingly prevalent threat, small business owners in the tax preparation sector are urged to enhance their cybersecurity measures. The Internal Revenue Service (IRS), together with its Security Summit partners, has introduced the “Security Six”—six straightforward steps aimed at safeguarding sensitive taxpayer information. For small business tax professionals, these recommendations are not just important but essential for maintaining client trust and ensuring business continuity.
Key Benefits of the Security Six
The “Security Six” recommendations offer small businesses a solid foundation for enhancing their cybersecurity posture. Here are the six strategies emphasized for immediate implementation:
- Anti-Virus Software: Essential for detecting and neutralizing malware, the ongoing updates provided by anti-virus software vendors help counteract evolving threats. Regular updates are crucial for optimal performance.
- Firewalls: Acting as a barrier against unauthorized access to computers and networks, firewalls are fundamental in preventing malicious traffic that could compromise client data.
- Multi-Factor Authentication (MFA): With new FTC regulations in place, MFA has become a requirement for tax professionals. By requiring additional verification steps, such as a security code along with a password, MFA significantly reduces the risk of unauthorized access.
- Backup Software and Services: Regularly backing up critical files ensures that small tax firms can recover quickly from both cyberattacks and unexpected failures, such as hardware malfunctions or natural disasters.
- Drive Encryption: This software converts sensitive client data into an unreadable format for unauthorized users, ensuring that only authorized personnel can access important files.
- Virtual Private Network (VPN): Particularly vital for remote work, a VPN creates a secure, encrypted tunnel for data transmission, protecting sensitive information when employees work from home or connect to public networks.
IRS Commissioner Danny Werfel stresses the importance of adhering to these basic security protocols: “Tax professionals face a number of challenges running a business and keeping up with the latest tax law changes, but they shouldn’t overlook some security basics,” he stated.
Practical Application for Small Business Owners
Small tax firms can readily implement these practices without extensive resources. SaaS solutions for anti-virus protection, firewall management, and backup services often come at affordable rates, making these cybersecurity measures feasible for small budgets.
A proactive approach is advocated through structured training sessions. Educating employees on recognizing potential threats, such as phishing scams, can bolster the security of the entire operation. These educational efforts are complemented by resources available through the IRS’s “Protect Your Clients; Protect Yourself” campaign, which is now in its ninth year.
However, small businesses should note that while the Security Six offer foundational protections, they are not exhaustive. Maintaining cybersecurity requires ongoing vigilance and a readiness to adapt to new threats.
Challenges to Consider
For small business owners, implementing these security measures comes with challenges. Initial setup costs, coupled with potential training expenses for staff, can be a deterrent. Additionally, as businesses grow and take on more clients, scaling security practices to protect increased amounts of sensitive data becomes crucial.
Moreover, compliance with updated regulations, such as the FTC’s mandate on multi-factor authentication, requires ongoing assessment and adjustment of current practices, which could consume valuable time and resources.
Creating a Response Plan
The IRS urges tax professionals to develop a comprehensive data theft response plan. This includes establishing communication with the IRS Stakeholder Liaison in cases of security incidents. Small business owners should recognize the significance of quickly addressing breaches, not only to mitigate damage but also to maintain client trust.
Tax professionals also have access to the Federation of Tax Administrators to report breaches to their respective state agencies. Being proactive can position small business owners to recover more quickly from any incidents.
In addition to the direct security measures outlined, tax professionals are encouraged to subscribe to the IRS’s e-News for continuous updates and best practices, further enhancing their knowledge of evolving cybersecurity threats and solutions.
For more details on the Security Six and additional resources for tax professionals, visit the original press release on the IRS website here. By taking action now, small business owners can secure their sensitive information and protect their clients, paving the way for a more secure future in the ever-changing digital landscape.
