{"id":13614,"date":"2018-08-28T08:30:12","date_gmt":"2018-08-28T13:30:12","guid":{"rendered":"http:\/\/taxprocenter.proconnect.intuit.com\/?p=13614"},"modified":"2020-07-24T09:55:49","modified_gmt":"2020-07-24T14:55:49","slug":"irs-reminds-professional-tax-preparers-of-data-security-plan-requirements","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/practice-management\/irs-reminds-professional-tax-preparers-of-data-security-plan-requirements\/","title":{"rendered":"IRS Reminds Professional Tax Preparers of Data Security Plan Requirements"},"content":{"rendered":"

The IRS and its Security Summit partners reminded tax professionals that protecting taxpayer information isn\u2019t just good for the clients and good for business \u2013 it\u2019s also the law.<\/p>\n

The Summit partners urged tax professionals to be aware of their obligations to protect client data and to cooperate with any IRS investigation related to data theft.<\/p>\n

The IRS has a number of publications to help tax pros navigate tax-related rules and regulations related to protecting data. In addition, the IRS, state tax agencies and the tax industry today reminded tax return preparers that a 1999 law requires that they create and implement a data security plan.<\/p>\n

The Summit partners urged tax professionals to be aware of their obligations to protect client data and to cooperate with any IRS investigation related to data theft.<\/p>\n

This is the eighth in a series called \u201cProtect Your Clients; Protect Yourself: Tax Security 101<\/a>. The Security Summit awareness campaign is intended to provide tax professionals with the basic information they need to better protect taxpayer data and to help prevent the filing of fraudulent tax returns.<\/p>\n

Although the Security Summit is making progress against tax-related identity theft, cybercriminals continue to evolve, and data thefts at tax professionals\u2019 offices is on the rise. Thieves use stolen data from tax practitioners to create fraudulent returns that are harder to detect.<\/p>\n

The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley (GLB) Act, gives the Federal Trade Commission authority to set information safeguard regulations for various entities, including professional tax return preparers.<\/p>\n

According to the FTC Safeguards Rule<\/a>, tax return preparers must create and enact security plans to protect client data. Failure to do so may result in an FTC investigation. The IRS also may treat a violation of the FTC Safeguards Rule as a violation of IRS Revenue Procedure 2007-40<\/a>, which sets the rules for tax professionals participating as an Authorized IRS e-File Provider.<\/p>\n

In addition, members of the IRS Electronic Tax Administration Advisory Committee (ETAAC) in June noted that they believe \u201cfar fewer than half of tax professionals are aware of their responsibilities under the FTC Safeguards rule and that even fewer professionals \u2026 have implemented required security practices.\u201d<\/p>\n

The FTC-required information security plan must be appropriate to the company\u2019s size and complexity, the nature and scope of its activities and the sensitivity of the customer information it handles. According to the FTC, each company, as part of its plan, must:<\/p>\n