The IRS, state tax agencies and the tax industry today reminded tax professionals that if they experience a breach or theft of taxpayer data they should immediately contact the IRS to help protect clients.
The IRS can take some steps to lessen the impact of tax-related identity theft on clients, but a quick response by tax practitioners discovering a problem can help avert problems. Generally, criminals work quickly to convert the stolen data into fraudulent tax returns to claim refunds.
Encouraging tax practitioners to report data thefts is the final news release in a 10-week, “Don’t Take the Bait” campaign, an effort focused on informing tax professionals. The IRS, state tax agencies and the tax industry, working together as the Security Summit, urge practitioners to immediately report data losses to the IRS and state tax agencies. This is part of the ongoing Protect Your Clients; Protect Yourself effort.
“The IRS, the states and the nation’s tax community continue to make progress in the battle against tax-related identity theft,” said IRS Commissioner John Koskinen. “But we need the help of tax professionals across the country to help strengthen this effort. In addition to working to ensure the safety of their systems, practitioners should promptly report identity theft or data breaches to help protect their clients.”
The IRS has created a reporting process for tax professionals. Those experiencing a data loss should contact their local IRS stakeholder liaison. The IRS representative will relay information to other parts of the IRS that need to know, including the Return Integrity and Compliance Services and Criminal Investigation divisions.
Also, be aware that some states require notification of data losses, and tax professionals should notify each state for which they prepare returns.
IRS stakeholder liaisons will need a list of the affected taxpayers, including names and Social Security numbers. Send the file to liaisons in a CSV (Comma Separated Values) format. If using Microsoft Excel, simply “save as” and scroll the list of options to CSV. Save and encrypt the file before emailing it to IRS staff.
Protecting Clients and Businesses by Reporting Data Thefts
Tax professionals should review IRS Data Theft Information for Tax Professionals for details on reporting losses. Preliminary steps include:
Contacting the IRS and law enforcement:
Contacting states in which the tax professional prepares state returns:
Contacting clients and other services: