Tax Tip 2024-74: Tax pros: Know the potential signs of a data breach

IRS Tax Tips

September 4, 2024

Issue Number: Tax Tip 2024-74

Tax pros: Know the potential signs of a data breach

The IRS and the Security Summit partners continue to see identity thieves targeting tax professionals in hopes of gaining valuable client tax information.

Tax professionals should contact the IRS immediately when there's an identity theft issue.

Tax professionals should watch for these red flags when their business experiences these situations:

• Slow or unexpected computer or network responsiveness such as:

o Software is slow or actions take longer to process than usual.
o Computer cursor moves or changes numbers without touching the mouse or keyboard.
o Unexpectedly being locked out of a network or computer.

• Client tax returns are being rejected because their Social Security number was already used on another return.

• IRS authentication letters (5071C, 6331C, 4883C, 5747C) are being received even though a tax return hasn't been filed.

• Getting more e-file receipt acknowledgements than the tax professional actually filed.

• The IRS disabled the tax professional’s online account.

• Transcripts are being delivered to the tax professional’s Secure Object Repository that they did not order.

• Notification from the IRS that the tax professional’s Centralized Authorized File number has been compromised. If they suffer a data breach, they should take proactive steps to protect their CAF number and consider requesting a new one to protect themself and their clients.

• Notification from the IRS regarding a client that they do not represent.

Tax pros should report data theft immediately

• Report the incident to their local IRS stakeholder liaison. Speed is critical. IRS stakeholder liaisons will ensure all the appropriate IRS offices are alerted. If reported quickly, the IRS can take steps to block fraudulent returns in the clients' names and will assist tax pros through the process.

• Tax pros should work with cybersecurity experts and insurance companies to determine help them the cause and extent of the loss.

• Visit the Federation of Tax Administrators to find state contact information. Tax professionals can share information with the appropriate state tax agency by visiting Report a Data Breach.

• Tax professionals should be proactive with clients who could have been affected and suggest appropriate actions, such as getting an Identity Protection PIN or completing a Form 14039, Identity Theft Affidavit, if applicable.

More information
Data Theft Information for Tax Professionals

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Issue Number: Tax Tip 2024-74