IRS provides guidance for tax professionals on data security

The Internal Revenue Service (IRS) recently released a publication that provides tips for data security for tax professionals. The publication is the result of a recent Security Summit that focused on the issue.

How serious of an issue is data theft from tax practitioners? Tax professionals that are not taking an increased focus on data protection are wise to begin to do so promptly. The IRS reports hundred of tax professionals have been the victims of data theft in recent years.

What is the purpose of hacking a tax professional’s client’s data? This data is used to file false returns for the benefit of the hacker.

How can tax professionals protect their client’s data? Top lessons from the publication include:

• Update software. Keep computer operating systems, anti-malware, anti-virus software, firewalls and other security software up to date.
• Consider a virtual private network (VPN). This is particular important for remote access. A VPN provides for a greater level of security for remote connections compared to the use of remote access software.
• Purchase insurance. In addition to property and liability insurance, consider purchasing cyber insurance coverage. This policy can result in additional experts in the event of a breach to help notify clients and take action to further protect data.

The IRS states data theft from tax practitioners’ offices is on the rise. As such, it is more important than ever that these practitioners take proactive steps to protect this data.

Tax preparation professionals also face increased scrutiny from the IRS. As such, tax professionals that receive notification from an IRS agent are wise to take proactive steps to protect their profession. An attorney experienced in tax matters of this nature can help.