Ask The California Employment Tax And Payroll Tax Attorney – Tax Professionals -Be Aware Of Pandemic-Related Email Schemes

By Robert S. Schriebman
2021

Introduction

Pandemic-related schemes are on the rise and aimed at tax professionals. This is the warning issued by the IRS and its Security Summit partners. On August 10, 2021 the IRS issued IR-2021-166, one of a series of press releases as the result of the annual Security Summit conferences. In recent months international criminals have used ransomware attacks throughout the world. In this country criminals are going after tax professionals especially tax return preparers. Unsuspecting professionals are opening up cleverly designed links and attachments to hack into computer systems and obtain client files and data for ransom and vital data theft. The Security Summit reminds professionals that securing their network to protect client data is their responsibility as tax preparers and advisors.

We cannot control what crooks do worldwide, but we can control what goes on in California and in our own offices.

This article will discuss the warnings issued in IR-2021-166 and the advice given by the Security Summit.

What These Schemes Have in Common
The Security Summit wants tax professionals to be aware of the common traits of these schemes

• They are carefully structured as coming from a familiar or trusted source such as the IRS, credit card company, bank software provider or another tax professional.
• They tell an urgent story to trick the professional into opening a link or attachment.
• Emails are exchanged between the crooks and the professional to induce the victims into a false sense of security.

The Trap is Sprung

Once the professional clicks on the link or attachment, malware is downloaded into the professional’s computer system giving the crooks access to all kinds of confidential information. The malware can identify drafts of tax returns and can complete those returns and e-file them changing the bank account information to their own accounts in order to steal refunds and make false unemployment compensation claims.

What to Do

The Security Summit advises tax professionals to use a two-factor or the multi-factor authentication option offered by storage providers and tax preparation providers. Use and maintain anti-virus software and drive encryption and regularly back up files.

Conclusion

The IRS has issued several publications designed to help professionals minimize their risk and exposure.

1. IRS Publication 4557 Safeguarding Taxpayer Data
2. Small Business Information Security: The Fundamentals by the National Institute of Standards and Technology.
3. The IRS Identity Theft Central pages for tax pros, individuals and businesses have important details as well.
4. Publication 5293, Data Security Resource Guide for Tax Professionals.

***

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.

Web Site Article 581