Identity theft and data security tips for tax professionals
With accounting going digital and countless information shared over the internet, it’s important that as a Tax Professional, you keep your and your clients’ information safe. Every year, the number of complaints involving criminals impersonating Internal Revenue Service (IRS) personnel climbs. Keep your financial data safe by following particular measures to minimize the increased danger of tax-related frauds and identity theft. It's also crucial to back up your data so that you can retrieve it quickly if calamity strikes.
Here are some tips to keep your information safe.
Maintain strong passwords
You’ve probably heard it plenty of times: keep your passwords diverse, complex and a secret. Identify theft and other frauds thrive, according to the IRS, because consumers frequently use the same login passwords for all of their internet accounts. Instead, for each of your online accounts, use strong, unique passwords that include:
- A combination of upper- and lower-case letters
- Numbers and special characters
- At least 10 characters long
Make it a habit to update your login and passwords on a regular basis. It may be beneficial to utilize software or applications such as Password Safe or Keeper Password Manager, which can generate and save strong passwords automatically.
If possible, use multi-factor authentication, it’s one of the most effective ways to deter thieves. Multi-factor authentication is available as an additional layer of security for all online tax preparation tools for tax professionals. All tax professionals are highly encouraged to choose this option, according to the IRS. If tax preparers had used this technology, many data thefts from tax offices may have been avoided.
Returning users must provide their username and password, as well as one or more additional elements, such as a security code given as a text message to a mobile phone. Multi-factor authentication should be used anywhere it is available, notably for cloud storage providers, email providers, financial institutions, and social media.
Implement a data security plan
Being prepared is the easiest way to avoid information theft. If you work for, or run a firm, consider outsourcing data security work to trusted businesses or hire one if possible. If you work for yourself, consulting a data security specialist could be a worthwhile investment to ensure your data is kept safe.
If you can’t afford those options, the IRS has free tools to help you stay on the right track to maintaining your data security. Here are some basic steps to protect your data:
- Install anti-malware/anti-virus security software on all devices (laptops, desktops, routers, tablets and phones) and keep software set to automatically update
- Use responsible passwords:
- Create passwords of at least eight characters (longer is better)
- Use special and alphanumeric characters
- Use passphrases instead of passwords
- Use a different password for each account
- Password protect wireless devices
- Consider a password manager program
- Encrypt all sensitive files/emails and use strong password protections
- Back up sensitive data to a safe and secure external source not connected full-time to a network
- Wipe clean or destroy old computer hard drives and printers that contain sensitive data
- Limit access to taxpayer data to individuals who need to know
Protect your computer
Password-protect critical files on your computer to prevent unwanted access. Encrypt essential files if possible. Use PDF encryption software to protect PDF copies of your tax returns, for example. Encrypting these files safeguards your information in the event that your computer is stolen or unwanted access is gained. Other preventative measures include:
- Keep confidential files in a folder that cannot be shared
- Remove your hard drive from your computer's hard drive before getting rid of it
- Install antivirus software on your computer
- Regularly run malware checks
Only use secure networks and websites
When you use a public Wi-Fi network, such as those found at airports, libraries, coffee shops, and hotels, the connection is frequently insecure. This implies that private information you submit over websites while utilizing these networks might be discovered by others.
When transferring personal and financial information over the Internet, utilize a secure wireless network whenever available. If you must use a public Wi-Fi hotspot, always transfer sensitive information over properly encrypted websites—every page on the site's URL address should begin with "https."
At Taxfyle, we value security as highly as taxes. We don’t leave anything to chance so to make sure our Pros and customers are safe, we regularly check our servers and maintain two-factor authentication. Additionally, our platform is tested quarterly to ensure that high security standards are maintained, which significantly reduces the risk that this site will be compromised and credit card or other sensitive data will be stolen or misused.
When you’re a Pro at Taxfyle, you can have the comfort of working your desired schedule, with the security of knowing your information will be kept safe.