Tax Tips – Tax Preparers Should Watch for Signs of Information Theft*

If you’re a tax preparer or professional, how do you detect theft? What are the subtle signs that indicate information has been stolen?

The IRS has joined forces with Security Summit to combat information and identify theft. State tax agencies, tax preparation firms, software developers, payroll and tax financial product processors, tax professional organizations, and financial institutions are part of Security Summit.[9] 

Tax preparers may be unaware of client data theft until they discover fraudulent tax returns being filed in their clients’ names. Safety experts urge preparers to protect client information by implementing strong security protections.

Here are some red flags for tax preparers of possible data theft:

  • The IRS begins to reject clients’ e-filed returns because a tax return with the same Social Security number has already been filed.
  • The IRS sends authentication letters to clients who haven’t filed returns. The letters include forms 5071C, 4883C, and 5747C.
  • The IRS sends refunds to clients who haven’t filed returns.
  • The IRS sends tax transcripts to clients who haven’t requested them.
  • The IRS sends notices to clients who have created online services accounts that their accounts were accessed.
  • The number of returns you filed with your Electronic Filing Identification Number is greater than the number of clients you have.
  • You are getting responses to emails you either didn’t send or don’t recall sending.

Other details may apply, and you can find more information on the IRS website.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Tip adapted from[10]