Why You Should Be Communicating With Clients About Tax Fraud

ITS-Tax-FraudIf you’re in the tax industry, you’re probably already on high alert due to the recent rash of fraudulent filings. Tax fraud is a big concern with the IRS this year, and with the recent Anthem data breach, it’s no wonder why.

The Anthem Breach

Anthem is the nation’s second-largest health insurer – and the data breach that happened affects its 80 million customers. While there is no evidence to suggest the cyberattack acquired health or financial information, the information they did get is just as important: names, dates of birth, physical and email addresses, medical IDs and Social Security numbers.

This is all information that can be used to file fraudulent returns that clients should be aware of.

Other Recent Data Breaches:

  • EBay – 145 million
  • J.P. Morgan Chase – 76 million
  • Home Depot – 56 million
  • Community Health Systems – 4.5 million
  • Michael’s – 1,250 stores point of sale devices
  • Nieman Marcus – 1.1 million
  • US Postal Service – 800,000 (employees)
  • Target – 110 million users
  • Anthem – 80 Million 

 

TurboTax

There’s also the current FBI investigation into a possible data breach of TurboTax. It all started when a number of states reported a spike in potentially fraudulent tax returns. The investigation has not shown that information was taken from TurboTax, but according to reports, it’s clear that scammers had access to 2013 returns.

This is also something clients and contacts should be aware of as they may have filed through TurboTax in previous years. It’s also a great reason to convince previous clients who left to do their own taxes, to come back to you and have them done professionally.

 

Things you should be communicating

Data breaches are not the only cause for concern, there are a ton of phishing scams and other ways scammers can gain the information needed to file a fraudulent return. Your clients should be aware of all of the precautions they should take to keep their information safe.

You should also encourage clients to come in as early as possible so that if someone does get their information, they can’t file a fraudulent return because the real one has already been filed.

 

Get in front of the security scare

In addition to warning clients about scams and communicating how to keep information safe, you should also educate them on how your tax office keeps information safe.

 

Consider purchasing insurance

There is insurance available to protect you and your clients from a data breach or Cyber Attack. If you haven’t already, this year might be a good year to look into it.

 

What precautions are you taking for your clients this tax season, and have you been warning them? Leave a comment.

 

Further Reads:

Don’t Operate Your Tax Business Without These Essential Tools

How to Choose Suitable Tax Software

How to Set Yourself Apart from Unqualified Preparers

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