Ask The California Employment Tax And Payroll Tax Attorney – IRS Warns Tax Professionals Of New Identity Theft Scams And Advice On Protecting Clients

 

By Robert S. Schriebman

2023

 Introduction

Every year, for the past 5 years, the IRS joins its Security Summit partners to inform the public and tax professionals of the latest identity theft schemes and offers advice to tax professionals on how to protect their clients. On July 11, 2023, the IRS issued a new announcement IR-2023-124. This article will set forth the IRS objectives and the advice offered for protecting clients from both identity theft and the theft of tax refunds.

Tax professionals are prime targets of criminal syndicates that are both tech and tax savvy. These crooks hack their way into tax professionals’ computer systems to access client data. Even if you think you have data stored in a secured platform, such as a cloud, lack of strong authentication makes this information accessible. These crooks file fraudulent tax returns that make it difficult for both the IRS and the FTB because the fraudulent returns use real financial information. Other crooks sell the basic tax preparer and client information on the web so that other crooks can try filing bogus tax returns.

In the next several weeks, the Security Summit will be highlighting specific scams and a series of simple actions that tax professionals can take to better protect both their clients and themselves from sensitive data theft. I will keep you informed.

Basic and Simple Steps Tax Professionals Should Take to Protect Their Clients and Themselves

• Create a security plan. The Written Information Security Plan, or WISP, is a 28-page, easy-to-understand document developed by and for tax and industry professionals to keep customer and business information safe and secure. These plans will be available through the Security Summit and the IRS Nationwide Forms this year.
• Sign up clients for Identity Protection PINS. The IRS now offers IP PINs to all taxpayers who can verify their identities online or on the phone with an IRS employee after filing a Form 15227 or in person.
• Phishing, Spear phishing and Whaling. These are real cyber schemes that put sensitive information at risk. Tax professionals are common everyday targets for these scams. Be aware of different phishing terms and what the scams might look like.
• Know the tell-tale signs of identity theft. Tax professionals who have reported data theft to the IRS, say they were unaware of signs that a theft had already occurred. Some of the more common signs are: Multiple clients suddenly receiving suspicious IRS letters requesting that they file a tax return. Some tax professionals are seeing E-file acknowledgments for more tax returns than they filed. Computer cursors are moving seemingly on their own.
• Help clients protect themselves whether working from home or traveling. Many businesses still have work-from-home policies and financial affairs may be handled in different ways. Tax pros can help their clients protect themselves by sharing key bits of information on computer security. In this way both sides have protection.

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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 50 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD, and he is not employed by the EDD or any other agency of the State of California.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

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