In an age where data breaches and identity theft are rampant, small business owners in the tax profession must be proactive in safeguarding their clients’ information. The Internal Revenue Service (IRS) and the Security Summit partners recently unveiled their summer campaign, "Protect Your Clients; Protect Yourself," designed to combat these threats head-on. This initiative highlights emerging scams and offers practical tools for tax professionals to defend against identity theft, a growing concern affecting many in the industry.
Over the course of five weeks, the campaign will release updates that target key threats confronting tax practitioners today. The first week has already shed light on new scams aiming to exploit both tax professionals and their vulnerable clients. This initiative, part of the tenth anniversary of the Security Summit, brings together the IRS, state tax agencies, and the tax community to raise awareness about the ongoing challenges of data theft.
IRS Commissioner Billy Long emphasized the collaborative efforts necessary to tackle these issues, stating, "This effort is a testament to what can be accomplished when business and government work together to educate the taxpayer and raise awareness of this wide-ranging problem."
The campaign intends to make tax professionals aware of increasingly sophisticated scams, which can jeopardize their businesses as well as clients’ sensitive data. Taylor Rodier, Legislative Affairs Manager with Taxwell, noted, “Tax professionals face an increasingly complex threat landscape, with identity thieves using ever more sophisticated tactics to exploit both practitioners and the sensitive data they manage.”
Among the scams highlighted, the “new client” scheme stands out as particularly nefarious. Fraudsters pose as legitimate taxpayers seeking tax assistance, which can easily lead to compromised information if tax professionals aren’t vigilant. Another prevalent scam involves attempts to acquire Electronic Filing Identification Numbers (EFINs), Preparer Tax Identification Numbers (PTINs), and Centralized Authorized File (CAF) numbers—crucial identifiers that scammers can exploit for fraudulent activities.
Tax professionals must also remain alert for phone, text, and social media scams. For example, the Zero Tax program misleads individuals into thinking their tax debts can be wiped out, soliciting personal identifiers like Social Security numbers in the process. Scams using artificial intelligence to create fake IRS communications are further complicating the landscape, making it difficult for tax professionals to distinguish between genuine correspondence and fraudulent attempts.
So, how can small business owners in the tax industry protect themselves and their clients? The IRS encourages tax professionals who experience a security breach to report it to their local IRS Stakeholder Liaison. Quick reporting is critical, as it can enable the IRS to block fraudulent returns and provide necessary assistance.
Next, tax practitioners should familiarize themselves with their state tax agencies’ procedures by visiting the Federation of Tax Administrators’ reporting page. Additionally, understanding the Federal Trade Commission’s Data Breach Response requirements is crucial for formulating a robust data security plan.
This summer’s campaign is not just about awareness; it also offers a series of actionable insights. In the coming weeks, upcoming topics will cover phishing tactics, the necessity of a security plan, and various tools like Multi-factor Authentication and IP PINs to help protect client information. Each topic will facilitate a deeper understanding of the security landscape while providing tangible steps that tax professionals can implement immediately.
As the IRS suggests, staying informed is the first line of defense. By engaging with these resources and participating in discussions at the upcoming IRS Nationwide Tax Forums—scheduled in cities including Chicago, New Orleans, Orlando, Baltimore, and San Diego—tax professionals can better fortify their defenses against identity thieves and maintain trust with their clients.
This campaign represents a significant opportunity for small business owners in the tax realm to not only protect themselves but to enhance their reputations as trustworthy entities in an increasingly treacherous digital age. By participating in this initiative, they can ensure that they remain on the cutting edge of security practices while safeguarding the sensitive data entrusted to them.
Learn more about the initiative and access resources by visiting the IRS Security Summit. The road to safety begins with awareness, and this campaign serves as a critical reminder to stay vigilant against evolving threats.
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