Nothing is worse than letting a hacker gain access to multiple accounts because you use the same password across the board. The majority of intrusions are due to poor password management.įirst, be sure that each account has a unique and very strong password. A hacker can gain access to an email password by using brute-force attacks, or by sending spoofing emails. The most common hack involves a third party gaining access to an email account-either yours or one of your clients’. Never let your guard down and say “It won’t happen to my practice.” Do Not Send Clients Files via Email Know that CPAs, enrolled agents, and other tax professionals are attractive targets to hackers. This overview is meant to provide some insight and best practices to help protect your practice and your clients from bad actors. It is important to understand that many of these issues are not truly hacks but rather careless uses of passwords and/or poor office policies. This profession is in the crosshairs clients may have their identities stolen and have to deal with fraudulent tax returns, and financial professionals may get hit with spoofing emails. Ĭybersecurity: Is Your Tax and Accounting Practice Secure?įew professions have felt the brunt of identity theft like the tax and accounting profession.

The FTC does provide a Four-Step Process for identifying risks (red flags) here which should be reviewed prior to developing the firms’ security policy.ĭownload our IRS Security Policy Template for free. Each business must include every situation that they can envision. The FTC does not provide industry guidelines. Unfortunately, there is no specific set of red flags for tax preparation, accounting, or financial services businesses.

Much larger penalties could come as a result of any civil action brought by a client and an astute plaintiff attorney armed with the fact that the defendant did not abide by the “Red Flag Rules.”Įach practitioner firm is responsible for developing its own list of red flags based upon its own specific methods and business operations, and the list should be as exhaustive as possible.

Violation of these rules can result in civil penalties of up to $2,500 per violation. To assist tax professionals in being compliant, we have curated the security tips below and created an IRS Security Policy Template that can be edited and used by tax professionals when establishing their internal policies. The IRS has been reminding tax professionals that the FTC’s Safeguard Rules apply to them, so pros must take action to protect taxpayer data from being compromised.

Cyber security policy manual