IRS Reports Nearly Two Dozen Acts of Data Theft on Practitioners This Year

By:
Chris Gaetano
Published Date:
Feb 18, 2020
cybersecurity

​Just 19 days into the tax season, the IRS was already reporting that about two dozen practitioners had been the victims of data theft. Averaged out, this is roughly one case per day. This is part of a larger trend of cybercriminals increasingly targeting CPAs to access valuable client data that could be used for identity theft. Between 2017 and 2018, the number of firms reporting data thefts increased by 29 percent, going from 182 to 234. 

The IRS has urged practitioners to use multifactor authentication, whereby users must enter their username/password credentials plus another data point that only they know, such as a security code sent to their mobile phone. So while thieves may steal passwords, they will be unable to access the software accounts without the mobile phones to receive the security codes.

The IRS also warned about specialized phishing schemes that target tax professionals. A thief may claim to be a potential client, a cloud storage provider, a tax software provider or even the IRS in an effort to trick tax professionals to download attachments or open links. These scams often have an urgent message, implying that there are issues with the tax professionals' accounts that need immediate attention.

The IRS also reminds tax professionals that they can track the number of returns filed with their Electronic Filing Identification Number (EFIN) on a weekly basis. This helps ensure that  EFINS are not being misused. They can simply go to e-Services, access the EFIN application and select EFIN status to see a weekly total of returns filed using the EFIN. If there are excessive returns, practitioners should contact the IRS immediately.

"The IRS, state tax agencies and the private-sector tax industry have worked together as the Security Summit to make sure the multi-factor authentication feature is available to practitioners and taxpayers alike," said Kenneth Corbin, commissioner of the IRS Wage and Investment division. "The multi-factor authentication feature is simple to set up and easy to use. Using it may just save you from the financial pain and frustration of identity theft."

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