You Need a Plan to Protect Taxpayer Data


The IRS Return Preparer Office emailed PTIN holders this week with a reminder that protecting taxpayer information is not only good for your clients and your business - it’s the law.

Tax professionals are the prime targets for cyber criminals and identity thieves, and data breaches continue to affect tax professionals at an alarming rate. Data security is a necessity for every tax professional, and protecting taxpayer data is your legal responsibility.

The Federal Trade Commission requires all financial institutions (yes, tax return preparers are included in the definition of financial institutions) to have a data security plan. Creating and maintaining a data security plan is the most important step you can take to reduce your risk of cyber theft.

You may decide to seek the help of a cybersecurity professional to customize a data security plan for your business. Before hiring a cyber pro, be sure to:

  • Ask for recommendations – talk to other tax professionals and business owners for references.
  • Be selective – hire a professional that you feel comfortable with and trust discussing the safety and security of your business and your clients.
  • Do interviews – ask about their level of experience, options for backing up data, and monitoring for current and emerging security threats.
  • Make it official – secure an agreement or engagement letter that details the terms of each service provided.

Take advantage of the following additional resources to help you safeguard your clients and your business: