Posted by James Financial Services Inc

How to Protect Your Client's Data During Tax Season & Beyond

How to Protect Your Client's Data During Tax Season & Beyond

Tax professionals are increasingly targeted by cybercriminals who seek to steal taxpayer data and file fraudulent tax returns. Ensure you take the required steps to protect your clients' data and protect your business.

Cyber attacks against tax corporations are on the rise, putting taxpayer data at risk. Find out how to protect your business and customer data with these cybersecurity tips.

Protecting company and customer data is important. However, during tax season, the IRS is particularly concerned about how to tax a corporation and businesses are working to protect taxpayer data. Cybercriminals thrive during tax season, taking advantage of insecure or poorly protected businesses to file fraudulent tax returns. Whether you're in the tax filing industry or just want to better protect your clients and their data, these cybersecurity tips will help.


The Importance of Cybersecurity

In 2018, 32.7% of adults in the United States experienced an attack on their email or social media accounts. However, personal accounts aren't the only data at risk. Major public violations, such as the Yahoo hack, affected 3 billion users. The Marriott data breach, reported in late 2018, affected 500 million accounts.

According to the IRS, data theft from professional tax offices is increasing, as is our diligence in protecting the user and taxpayer data. Cyber attacks and crimes are the fastest growing crime in the United States and a growing global threat as more people become Internet users. Finding new and effective ways to protect customer data is more important than ever.


Keep up to date with safety rules.

One of the initial steps in protecting your business and consumer data is understanding your legal responsibilities as a small business or tax corporation. IRS Publication 4557 was created to help tax companies, especially those that file electronic tax returns, develop a security plan to keep taxpayer data safe. Reviewing all tax security regulations before developing your plan will help you refine best practices for the type of data stored and used by you and your business.


Install Security Software

Antivirus software, firewalls, and drive encryption won't stop all cyber threats. Still, this basic practice will help you act as a layer of protection between you and identity thieves looking for data on taxpayers. Antivirus and antispyware software help to protect your devices from unauthorized software or malware. Keeping the software up-to-date is also an important step. Regular updates help the software identify the latest threats and stop them before you know they are there.


Backup and Protection of Archived Data

Archived data that is not encrypted has a higher risk of being hacked. It is good to encrypt stored data with passwords before backing it up to the cloud or a server. Also, avoid using computers or public networks to access this stored data and erase any old storage devices that are no longer in use.


Closely follow Company Activities.

Detecting data theft can be easier than we think if we know where to look. For tax professionals, tracking the number of returns completed with your e-filing identification number will help you track fraudulent returns. Unexpected rejected returns, notices to your clients about returns they haven't filed yet, other unusual communications, and even a slower-than-normal network can all be indicators of data breaches.


Learn how to recognize and report cybercrime

Learn to recognize phishing emails, especially those that appear to come from the IRS, tax software vendors, your data storage vendor, or other legitimate organizations that may communicate with you via email. Don't download attachments or click links in suspicious emails, and pay special attention to the links' email address, subject, and domain names. The slightest clue (a missing letter, misspelled words, or the use of slashes and dashes) can indicate a scam.

Once you have identified a scam, report it directly to the appropriate authority. For tax offenses, report it to the Internal Revenue Service (IRS) and report it to the FBI or the Secret Service. File a police report with the local police in case of a data breach and with the state attorney general or the Federation of Tax Administrators to report a state tax violation.


Get professional security support.

When it comes to protecting customer and taxpayer data, a little professional support helps a lot. Work with nearby IT and security professionals to ensure that you have the best software and network values and that your business is in compliance with state and federal taxpayer data security regulations.


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