Tax Pro Identity Theft. Beware of identity theft Targeting tax professionals. Cyber-criminals have a new scam. First, they control your computer remotely to file false tax returns. Second, they steal tax refunds. Furthermore, the criminals steal sensitive client information.
This scam is a big deal to the IRS. Therefore, these crimes pose a significant threat to tax professionals. What’s good for the goose…
As a result, tax pros should consider the following steps to prevent Tax Pro Identity Theft.
- Run a virus scan to search for viruses and malware.
- Strengthen passwords.
- Chose a password with at least least 8 characters.
- The password can have a mix of numbers, letters and special characters.
- Be alert for phishing scams.
- Do not click on links or open attachments from unknown senders.
- Educate staff members about the dangers of phishing scams, emails, texts and calls.
Furthermore, review software that your employees use to remotely access your network. Review the practices of your IT support vendors. Review the practices of any vendor that remotely troubleshoots your systems. Remote access software is a potential target for bad actors to gain entry and take control of a machine.
In addition, review IRS Publication 4557 Safeguarding Taxpayer Data, A Guide for Your Business. The guide provides a checklist to help safeguard taxpayer information and enhance office security.
In conclusion, Our firm represents tax return preparers in these cases. We have helped Preparers accused by the IRS of stealing client refunds. We helped establish the theft was the result of cyber-criminals.
We’ve learned that the IRS may have difficulty in tracing the IP addresses of the criminals. Furthermore, the IRS may believe that the fraud originated from the tax preparer’s office. In fact, the criminals may have accessed the office computers remotely. This is hard to trace.
Also, the refunds can’t be traced in many cases. For example, criminals may send the refunds to a temporary address in the form of pre-paid debit cards.
The IRS could shut down the preparer’s EFIN account. The IRS may also send revenue agents to investigate and impose preparer and promoter penalties.