October 17, 2019 - Douglas Myser

Steps to safeguard taxpayer data. The Internal Revenue Service partners with state tax agencies and the tax professional community to fight the 21st century identity thieves. after forming the Security Summit and enacting a series of safeguards, the partners are making inroads. Data thefts at tax professionals offices are on the rise. As the Security Summit makes progress protecting the integrity of the IRS systems, identity thieves need more taxpayer data to file fraudulent tax returns. And they have placed tax practitioners firmly in their sights. Data security is now a necessity for every tax professional, whether a partner in a large firm or a sole practitioner, and every Authorized IRS e-File Provider. Every employee, both professional and administrative staff, should be educated about security threats and safeguards. Everyone has a role to play in protecting information. Steps to safeguard taxpayer data.

In fact protecting taxpayer data is the law. Federal law gives the Federal Trade Commission authority to set data safeguard regulations for various entities, including professional tax return preparers. According to the FTC Safeguard Rule, tax return preparers must create and enact security plans to protect client data. Failure to do so may result in an FTC investigation. Reporting of Security Incidents: Online Providers of individual income tax returns shall report security incidents to the IRS as soon as possible but not later than the next business day after confirmation of the incident. Steps to safeguard taxpayer data. Protecting taxpayer data is good business as data security can protect not only your business but your clients information as well. A theft may mean a loss of reputation, a loss of clients or a loss of money. Consider engaging security professionals for assistance or check with your professional liability carrier about data theft coverage.

Under the Safeguards Rule, financial institutions must protect the consumer information they collect. The Gramm-Bliley-Leach Act requires companies defined under the law as "Financial institutions" to ensure the security and confidentiality of this type of information. The "Financial Institutions" definition includes professional tax preparers.

If you lost money due to a data breach and find you cannot pay your taxes, or have unfiled tax returns, Federal Tax Resolution is a 36 year old Tax Resolution Company that can help you determine your options for Tax Relief, including whether you qualify for the IRS Fresh Start Program. Our Tax Resolution Services include Tax Court, even though 98% of our clients only need traditional Tax Resolution, so they don't end up with a IRS Wage Garnishment.