Recently, the IRS, state tax agencies, and the U.S. tax industry hosted a Security Summit to help taxpayers combat identity theft refund fraud. In this article, we’ll share our top takeaways from the Summit as well as a few other red flags and best practices to help you protect your clients’ information and your business from identity theft. Identity Theft Red Flags As a tax professional, you need to be vigilant while watching out for identity theft red flags, both in your business and for your clients. Here is a list of red flags to watch out for that pertain to your business: Experiencing slow or unexpected computer or network responsiveness, such as software or actions taking longer than usual to process. Noticing the computer cursor moving or numbers changing without any input from the mouse or keyboard. Unexpectedly being locked out of a network or computer system. Beware of these identity theft red flags when talking to and working on behalf of your clients: When a client is notified that an IRS online account was created for them, but they did not create it. Their IRS online account was accessed without their knowledge. The IRS disabled their online account. A client received a tax transcript that they did not request. Their personal information changes without the client requesting it. They receive incorrect balance due or other notices from the IRS, which do not match the tax return you filed on their behalf. When a client calls or emails you, saying they are responding to a call or email you never made. They receive funds without having filed a tax return. Receiving more e-file receipts than you actually filed. A client’s tax returns are rejected due to someone else already using their Social Security number on another return. Receiving IRS authentication letters (5071C, 6331C, 4883C, 5747C) even when no tax return has been filed. A client’s information return details …
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