The Internal Revenue Service (together with state tax agencies and the tax industry to form the “Summit on Security”) recently highlighted specific signs of identity theft that tax practitioners need to watch out for so they can protect themselves and their customers.
Five Critical Signs
- Electronically submitted client reports were rejected because the client’s social security number was already used on another report.
- More acknowledgments of receipt of electronic files received than declarations produced by the tax professional.
- Clients responded to emails that the tax professional did not send.
- Slow or unexpected computer or network responsiveness, such as: software or actions take longer to process than usual; the computer cursor moves or changes numbers without touching the mouse or keyboard; and unexpectedly locked out of a network or computer.
- Customers report receiving any of the following: IRS authentication letters (5071C, 6331C, 4883C, 5747C) even if they did not file a return; a refund even if he did not file a return; a tax transcript that they did not request; emails or calls from the tax professional that they did not initiate; a notice that someone created an IRS online account for the taxpayer without their consent; a notice that the taxpayer did not expect:
- Someone accessed their IRS online account,
- The IRS deactivated his online account,
- Balance owing or other IRS notices that are not correct based on the return filed or if a return was not filed.
Tax practitioners who suspect that they or their clients have been victims of identity theft should report it immediately to the IRS and contact their insurance or cybersecurity experts to help determine the cause and extent. of the loss. They should:
- Report it to Local liaison with IRS stakeholders. Liaisons will notify the IRS Criminal Investigation and others within the agency on behalf of the practitioner. Speed is essential. If reported promptly, the IRS can take action to block fraudulent filings on behalf of clients and will assist tax practitioners through the process.
- Email the Federation of Tax Administrators at [email protected]