It’s no big secret that identity theft crime is on the rise. One in 15 people will be the victim of an identity theft crime ranging anywhere from fraudulent charges on a credit card to loan applications in your name.
The Internal Revenue Service, various state tax agencies, as well as tax professionals, have all teamed up to combat this growing issue. In 2022 they hosted a Security Summit to address these problems and how best to prevent or resolve them. IRS Commissioner Chuck Rettig says, “Tax pros must be vigilant to protect their systems from identity thieves who continue to look for ways to steal data.” Mr Rettig goes on to state, “Practitioners can take simple steps to remain on the lookout for signs of data and identity theft. It’s critical for tax pros to watch out for these details and to quickly take action when tell-tale signs emerge.” However the issue many tax preparers face is knowing what to look out for in order to spot an identity theft before it happens. In this article we list some telltale signs of identity theft to look out for as a tax pro.
- E-filed tax return is rejected because the social security number has already been used.
- More e-file acknowledgments are received than returns filed.
- The tax pros receive responses to emails they haven’t sent.
- Client receives authentication letters without filing a return.
- A client receives a refund before filing their return.
- Clients receive emails or calls from a tax pro which they did not first initiate.
- A notice that an IRS account was created in their name without their consent.
- A client receives direct communication from an individual claiming to work for the IRS.
As a tax professional it is part of your job, both for the client’s safety as well as your own, to look out for these signs and ensure your business has the highest security possible. We recommend SFP Works for your tax filing software as it is an IRS e-file authorized partner and is secured by IBM. Keep your client’s information safe and secure with a professional tax software you can trust.
However, if one of your clients has already been a victim of identity theft then it is vital for you to take these steps as soon as possible. First, report the crime to your local IRS liaison. The liaison can report this issue to the IRS’s Criminal Investigation Division and anyone else in the agency who may be able to help. The second option is to email the Federation of Tax Administrators. They will be able to give you information on what to do and assist you in reporting the crime to the state attorney general. Speed is vitally important when combating identity theft activities so make sure to stay vigilant and report suspicious activity quickly.
