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Business Owners – Don’t Be a Mark for Cyber Criminals This Tax Season

Tax-related identity theft, without question, is on the rise. The good news is that the IRS has made a commitment to continue efforts to combat tax return theft and refund fraud – when combined with the help of eagle-eyed tax practitioners, business owners can breathe a little easier come filing time.

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Tax-related identity theft, without question, is on the rise. The good news is that the IRS has made a commitment to continue efforts to combat tax return theft and refund fraud – when combined with the help of eagle-eyed tax practitioners, business owners can breathe a little easier come filing time.

Cyber criminals are not known to make hollow threats, and in the wake of identity thieves virtually flaunting their data-stealing prowess, businesses – no matter their size – should intensify their cyber security protections.

It’s officially tax season so businesses are particularly ripe for the picking. Cyber criminals are displaying an increasingly sophisticated knowledge of tax codes and filing practices, making it easier to obtain valuable information to file fraudulent returns.

It may be impossible to completely thwart hack attacks, but there are specific signs that can indicate whether a business has been targeted. Businesses, partnerships, and estate and trust filers should contact the IRS immediately if any of the following issues arise.

If a request for file extension is denied because a tax return with the Employer Identification Number (EIN) or Social Security Number (SSN) is already on file, that’s a red alert. The same if an electronically filed return is rejected due to a duplicate EIN or SSN already filed with the IRS.

Be aware of an unexpected tax transcript receipt or IRS notice that doesn’t match up with anything submitted by the filer. And if expected and/or routine correspondence from the IRS isn’t received, it could be because a cyber thief has changed your business’ address.

For those business owners who rely on tax professionals to prepare and file their returns, take some comfort in knowing that the IRS has taken several steps in recent years to keep those cyber criminals at bay. Tax software products now share many data elements with the IRS and state tax agencies; as such, suspicious tax returns are more easily identified.

Moreover, the IRS now encourages tax practitioners to use tax preparation software that asks a series of security questions to better protect the business filer. The information sought includes total income amount from prior year filings, parent company information, and previous estimated tax payments made.

Tax-related identity theft, without question, is on the rise. The good news is that the IRS has made a commitment to continue efforts to combat tax return theft and refund fraud – when combined with the help of eagle-eyed tax practitioners, business owners can breathe a little easier come filing time.

 

Disclaimer: Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statutes, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law. 

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