The IRS and its Security Summit partners closed their summer educational series with an urgent warning to tax professionals about growing data theft threats on Sept. 16, as the fall tax season approaches and cybercriminals increasingly target accounting firms.
Tax professional data breaches have been identified as a significant and growing vector for taxpayer identity theft, enabling criminals to file fraudulent tax returns and steal refunds, the IRS said. The warning highlighted specific threats including phishing attacks, credential theft and remote access exploitation.
The Security Summit is a public-private partnership between the IRS, state tax agencies and the private tax industry, formed in 2015 to combat tax-related identity fraud. The group has issued increasingly urgent warnings as cybercriminals shift tactics from targeting individual taxpayers to compromising tax preparers who hold data on hundreds or thousands of clients.
For American taxpayers, the security of their tax professional’s data systems is a critical but often invisible vulnerability. A single breach at an accounting firm can expose the personal and financial information of every client, enabling identity thieves to file fraudulent returns before victims are aware of the compromise.
The IRS has reported that breaches at tax professional offices have resulted in thousands of fraudulent returns in recent years, costing the federal government and individual taxpayers significant sums. Stolen refunds divert federal revenue and create lengthy resolution processes for affected filers.
The warning urged tax professionals to implement multi-factor authentication, maintain updated anti-virus software, encrypt client data and train staff to recognize phishing attempts. The IRS noted that many small and mid-size accounting firms lack dedicated IT security staff, making them particularly vulnerable.
The fall filing season, which includes extended returns due Oct. 15 and quarterly estimated tax deadlines, represents a peak period for cybercriminal activity targeting the tax preparation industry.