Identity theft is an increasing problem for tax preparers.  Tax preparation offices are great places to hack. Here are some best practices  we need to do to protect us and our clients. 

1. Create logins and passwords to your system that are hard to hack.

• Use the maximum characters allowed.
• If you want to use for example:
  • “I was born in Houston Texas in  January 5,1992” You could use iwbihtj592 and then add symbols and numbers to complete the maximum characters allowed.
  • “My mother’s maiden name is smith and she married John Doe in Los Angeles ” could translate to mmmnisasmjdila.
  • Song lyrics work to. ” Rudolf the red nose reindeer had a very shiny nose and if you ever saw him” could translate to rtrnrhavsnaiyesh

These are things that make no sense to someone else but are easy for you to remember.

Using a password generator will do this for you and you only have to remember one PW

2. Change passwords on a regular basis. If you haven’t done so recently take the time to revamp your passwords. Passwords should be changed at a minimum of once per year. Every 90 days is even better. Chances are we are not going to change our passwords every 90 days. So, make your passwords strong as possible

3. Always encrypt and password protect any data sent to clients. Emails are easy to hack using encryption will help safeguard the data. If your software offers a secure file exchange portal be sure and check it out. Those portals are designed to exchange information more securely.

4. Always Encrypt any hard drives that contain client data. Encrypting the hard drives adds another level of security.

5. Update your firewall,anti-spyware and anti-virus software. Regularly check for the latest update and security patches for your software.

6. If you are also and ERO, you should regularly check your e- services account on a regular basis. IRS updates our e-services accounts on a regular basis. We should be checking our account to look for abnormal activity. If it appears that your EFIN may have been compromised notify the IRS immediately.

7. Never click on links in emails. Always go directly to the website.

Tax preparers  are subject to the Gramm-Leach Bliley Act and the FTC Financial Privacy and Safeguards rules. We are required to monitor, evaluate and adjust our security practices to protect client data. Penalties may apply for failure to do so. IRC imposes criminal and monetary penalties for knowingly or recklessly making unauthorized disclosures.

To participate in the Annual Filing Season Program a tax preparer needs to take 18 hours of continuing education from an IRS approved CE provider by December 31st each year.

This includes:

• A six hour Annual Federal Refresher course (AFTR course)
• 10 hours of Federal Tax Law and
• Two hours of ethics.

Certain tax preparers are exempt from the AFTR course:

• Anyone who passed the Registered Tax Return Preparer test between November 2011 and January 2013.
• Return preparers who are active registrants of:
  • Oregon Board of Tax Practitioners.
  • California Tax Education Council (CTEC).
  • Maryland State Board of Individual Tax Preparers.
  • Tax preparers who passed the Special Enrollment Exam part 1 within the past two years.
  • VITA/TCE volunteers
  • Other accredited tax focused credential-holders
    • Accreditation Council for Accountancy
    • Taxation’s Accredited Business Accountant/Advisor (ABA)
    • Accredited Tax Preparer Programs

PTIN holders who meet one of these exemptions will need to complete annually:

• 3 hours of federal tax law updates
• 10 hours of  federal tax law
• 2 hours Ethics

Only Unenrolled Return Preparers who complete these requirements annually will allowed the limited representation rights before the Internal Revenue Service

The limited rights for unenrolled return preparers with AFSP certificate allow them to only represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. They cannot represent clients whose returns they did not prepare and they cannot represent clients regarding appeals or collection issues even if they did prepare the return in question.