The IRS has issued a new warning, urging tax professionals to spot and understand the signs of data theft so that they can protect their clients.

In the latest "Protect Your Client; Protect Yourself" notice from the Security Summit, a public-private partnership that works to protect the tax system against tax-related identity theft and fraud, the IRS reminded tax professionals that they should contact the IRS immediately when there's an identity theft issue, while also contacting insurance or cybersecurity experts to assist them with determining the cause and extent of the loss.

“It's important for tax professionals to protect their systems from identity thieves who always look for new methods to steal data," said IRS Commissioner Daniel Werfel. "There are practical ways for practitioners to keep on top of the latest trends and signs of data and identity theft."

The IRS warned tax professionals to be on the lookout for the following warning signs from their clients:

● Clients receive notice that an IRS online account was created without their consent, that someone accessed their IRS online account without their knowledge or that the IRS disabled their online account;

● Clients receive a tax transcript that they didn't request;

● Balance due or other notices from the IRS are received that are not correct based on the tax return filed;

● Clients respond to calls or emails that the tax pro didn't make; and

● Clients receive refunds without filing a tax return.

The IRS also warned tax professionals to be aware when their business encounters any of the following situations:

● Slow or unexpected computer or network responsiveness, such as software or actions taking longer to process than usual; computer cursors moving or changing numbers without anyone touching the mouse or keyboard; or unexpectedly being locked out of a network or computer;

● Client tax returns being rejected because their Social Security number was already used on another return;

● IRS authentication letters (5071C, 6331C, 4883C, 5747C) being received even though a tax return hasn't been filed; and

● Receiving more e-file receipt acknowledgements than the tax pro filed.

If tax professionals or their firms are victims of data theft, they should:

● Report it to their local IRS stakeholder liaison. Speed is critical. IRS stakeholder liaisons will ensure that all the appropriate IRS offices are alerted. If a data breach is reported quickly, the IRS can take steps to block fraudulent returns in the clients' names and will assist tax pros through the process;

● Email the federation of tax administrators at statealert@taxadmin.org. They will provide guidance on reporting to state tax agencies. Most states require that the state attorney general be notified of data breaches; and

● Tax professionals should be proactive with clients who could have been affected by a data breach, and suggest appropriate actions, such as obtaining an IP PIN or completing a Form 14039, Identity Theft Affidavit, if applicable.

More information is available at Data theft information for tax professionals.