This is why tax professionals, who hold sensitive financial data, are critical targets. WASHINGTON — The Internal Revenue Service, state tax agencies and the tax industry today warned tax professionals of the continuing threat from cybercriminals and launched a series of accounting security tips to encouraging stronger measures to protect taxpayer data. The IRS and its Security Summit partners have initiated a summertime security awareness campaign for tax professionals with an expanded guide that provides critical steps to protect client data.
As the Summit has increased the tax community’s defenses against identity theft and refund fraud, cybercriminals continue to evolve. Increasingly, they look to data thefts at tax professionals’ offices to obtain large amounts of sensitive taxpayer data. Thieves then use stolen data from tax professionals to create fraudulent returns that are harder to detect. The number one goal of phishing thieves is to monetize their stolen information. As the IRS, states and tax industry have made inroads into tax-related identity theft, criminals need even more information to better impersonate taxpayers.
The work group also will analyze and address industry lead reporting compliance with Publication 1345 and the requirement upon industry to provide identity theft data. At a Washington press conference, Summit leaders also detailed new and expanded safeguards for taxpayers in the upcoming 2017 tax season. The 2017 focus revolves around “trusted customer” features that will help ensure the authenticity of the taxpayer and the tax return – before, during and after a tax return is filed. The additional protections will build on the 2016 successes that prevented fraudulent returns and protected tax refunds. This effort is part of the Summit’s “Protect Your Client, Protect Yourself” education series aimed at tax professionals. The IRS and Summit partners also have been encouraging individual taxpayers to increase their security awareness through the “Taxes.Security.Together” campaign.
It found most hacking efforts – 81 percent – used either stolen passwords or accessed weak passwords. The Anti-Phishing Work Group , a not-for-profit industry association focused on eliminating the identity theft and fraud resulting from phishing, reported seeing a significant increase in phishing activities in 2016. The tax community and others with taxpayer data – including human resource departments, small businesses and others – are among those targeted with increasingly sophisticated phishing schemes. WASHINGTON — The IRS today warned tax professionals to increase their computer security and to beware of their inbox – specifically the successful email scams dubbed spear phishing that identify themselves as a friend, customer or company. WASHINGTON — The Internal Revenue Service and its Security Summit partners today began the second year of their “Taxes.
As an effort to strengthen security measures, the IRS and its security summit is calling for the help of all taxpayers, including the help of tax preparers and businesses to help educate clients, friends, family, and employees about these security measures. To start the awareness campaign, the IRS revised Publication 4557, “Safeguarding Taxpayer Data,” to better reflect threats to tax professionals. The guide outlines basic steps tax professionals should take and provides details on how to comply with requirements for a data security plan. The IRS also created Publication 5293, “Data Security Resource Guide for Tax Professionals,” which highlights a compilation of IRS.gov resources for tax preparers.
All IRS financial standards have been updated in irsLogics All IRS financial standards have been updated in irsLogics. Although these rate changes are minor, they can still impact the calculations in financial interview expense and summary screens. Updated IRS forms 433-A, 433-B, and 8821 We are aware that the current versions of these forms in irsLogics need to be updated.
The series of security awareness tips focus on security measures tax professionals should take to better protect taxpayer data and to guard against the ever-evolving nature of identity theft and refund fraud. The Security Summit partners note that cybercriminals worldwide are actively targeting tax professionals in an effort to steal taxpayer information that would allow them to file fraudulent tax returns for refunds. The Summit group, a partnership between the public and private sectors, urged the tax community to take steps now to protect information before the 2017 filing season. Tax professionals are entrusted with our most private financial and identifying data.
As with 2016, many of the new features will not be visible to taxpayers but will provide the IRS and states with the information they need to identify and stop fraudulent identity theft returns. WASHINGTON – The Internal Revenue Service, state tax agencies and industry partners today finalized plans for 2017 to improve identity theft protections for individual and business taxpayers after making significant inroads this year against fraudulent returns. The IRS has joined with representatives of the software industry, tax preparation firms, payroll and tax financial product processors and state tax administrators to combat identity theft refund fraud to protect the nation’s taxpayers. Identifying additional data elements from tax returns that will help improve authentication of the taxpayer and identify possible identity theft scams and sharing data elements from corporate tax returns.
Financial Services Work Group
IRS proposes rules for truncated SSNs on W-2 forms The Internal Revenue Service has proposed regulations allowing truncated Taxpayer Identification Numbers on the Form W-2 to help protect people’s Social Security Numbers from identity theft. Verizon, which publishes an annual data breach investigations report, warns that 1 in 14 users are tricked into opening a link or attachment from a phishing email. Most tax professionals already have strong security measures, but some continue to be vulnerable to various scams or security weaknesses. The number of bank partners grew to 620 institutions from 514 institutions in 2015, enabling internal processes to continue improving. The number of suspect refunds stopped by banks and returned to the IRS dropped by more than 50 percent, to 108,539 in 2016 compared to 243,361 in 2015, demonstrating our improved ability to stop fraudulent returns before refunds are paid. The dollar amount of suspect refunds dropped to $239 million from $829 million in 2015. The number of people who filed affidavits with the IRS saying they were victims of identity theft dropped 50 percent during the first nine months of this year compared to 2015.
“The IRS and the Security Summit partners urge all tax professionals to take stronger security steps to protect themselves and their clients,” said Acting IRS Commissioner David Kautter. “With the help of the Summit partnership, the IRS has made major progress protecting taxpayers in the battle against tax-related identity theft. But the threat remains, and we need the help of tax professionals to take basic steps to safeguard their systems and taxpayer data.”
The thieves used that information to file 2017 tax returns using all the taxpayer real data, including their bank accounts for direct deposit. IRS Commissioner John Koskinen convened the public and private tax administration leaders in 2015 to meet the evolving threat posed by increasingly sophisticated identity thieves, which included national and international criminal syndicates.
Summit partners believe an ISAC ultimately promises significant gains in detecting and preventing identity theft refund fraud and will provide better data to law enforcement to investigate and prosecute identity thieves. This effort will provide all Summit partners with a threat assessment capability, early Irs, Security Summit Partners Launch New Awareness Campaign warnings about problems and insights about identity theft fraud schemes through nimble and agile information sharing. The tax industry will share with the IRS and states 32 data elements from business tax returns – extending more identity theft protections to business filers as well as individuals.
Taxpayers Who Already Filed 2014 Returns Using Incorrect Forms 1095
Use different passwords for each account, use special and alphanumeric characters, use phrases, password protect wireless devices and consider a password manager program. Create a data security plan using IRS Publication 4557, Safeguarding Taxpayer Accounting Periods and Methods DataPDF, and Small Business Information Security – The FundamentalsPDF, by the National Institute of Standards and Technology. This team, working together, was able to shut down one scheme in which a criminal stole client data from a tax preparer.
- There were 199,000 reports in 2018, 242,000 in 2017 and 401,000 in 2016.
- The Internal Revenue Service announced at the end of December that it will begin accepting tax returns for the 2014 fiscal year starting Jan. 20.
- Twenty-three states worked with the financial industry on an external leads program, similar to the IRS External Leads Program.
- The 2017 focus revolves around “trusted customer” features that will help ensure the authenticity of the taxpayer and the tax return – before, during and after a tax return is filed.
- The work group also is conducting several “test and learn” pilot programs to enhance ways of identifying and stopping fraudulent or questionable refunds.
IRS Questioning 2014 Earned Income Tax Credit Claims The US Internal Revenue Service has disclosed that it has sent letters to those taxpayers who may not be entitled to some or all of the earned income tax credit claimed on their 2014 tax returns. From January through May, there were 177 tax professionals or firms who reported data thefts involving client information involving thousands of people. The IRS currently is receiving three to five data theft reports a week from tax practitioners. Not all data losses are due to phishing scams but stopping this commonly used tactic by cybercriminals would do much to lessen the current losses. Each day starting Dec. 3, National Tax Security Awareness Week will focus daily on a single key issue that poses a threat to individuals, businesses and tax professionals and provides tips to better protect sensitive data from cybercriminals. The importance of these basic steps was highlighted yet again this year when a sophisticated cybercriminal gang breached numerous practitioner offices by gaining remote control access of computers and stealing taxpayers’ 2016 tax information.
Tax Professionals Work Group
The IRS also strongly urges all tax professionals to sign up for official IRS communications such as e-News for Tax Professionals. Taken together, these “trusted customer” features will help the IRS and states do an even better job of detecting fraudulent returns and protecting taxpayers.
The IRS anticipates the verification code will be expanded in future years for all Forms W-2. Several new data elements shared on tax returns from Summit partners helped the IRS stop over 74,000 suspicious returns, representing over $372 million in refunds that were prevented from being paid. Security Summit initiatives put in place in 2016 had a dramatic impact on the collective ability to identify and stop fraudulent returns.
Irs Reports An Increase In The Tax Gap
Between 2015 and 2019, the number of taxpayers reporting they were identity theft victims fell 80%. In 2019, the IRS received 137,000 reports from taxpayers compared to 677,000 in 2015. There were 199,000 reports in 2018, 242,000 in 2017 and 401,000 in 2016.
This year’s campaign also coincides with this summer’s IRS Nationwide Tax Forums, which will again feature a major focus on security protection for tax professionals. The sessions will provide continuing education credits for sessions led by experts from inside and outside the IRS. The American Coalition for Taxpayer Rights also will again sponsor special sessions with experts from the Pell Center for International Relations and Public Policy at Salve Regina University in Rhode Island. Make sure the security software is always turned on and can automatically update. Encrypt sensitive files such as tax records you store on your computer.
As part of that effort, the Summit partners will launch a new Identity Theft Tax Refund Fraud Information Sharing and Analysis Center, or ISAC. This project, in its initial stages for 2017, will serve as an improved early warning system – identifying emerging identity theft schemes and quickly sharing that information among Summit partners so that all of the participants can enact safeguards. The software industry will continue to enhance software password requirements for individuals and tax professional users – providing additional safety prior to filing. Industry and state partners provided information that helped improve IRS fraud filters and stop additional bad tax returns, including 57,000 that would have bypassed IRS processing filters without Summit assistance. Many states are rolling back reopening plans, and the looming flu season could present additional complications. That’s why the Internal Revenue Service and Security Summit partners are developing a five-week data security campaign that focuses on remote work. The IRS, state tax agencies and the nation’s tax industry held the 5th Annual National Tax Security Awareness Weekon November 30 – December 4, to urge increased security measures as fraudsters exploit COVID-19 concerns.
This is highlighted by the number of new people reporting stolen identities on federal tax returns falling by more than 50 percent, with nearly 275,000 fewer victims compared to a year ago. The thieves then called the taxpayers, trying to trick them into returning the fraudulent refunds.
With the steps listed above, people can take steps to protect themselves online. Awareness about business identity theft is one in a series of tips offered by the Internal Revenue Service, state tax agencies and tax industry, which partner as the Security Summit to protect taxpayers.
Back up sensitive data to a safe and secure external source not connected fulltime to a network.
Author: Emmett Gienapp