IRS Warns of a New Wave of Attacks Focused on Tax Professionals

[Elrod]

WASHINGTON – The Internal Revenue Service today warned tax professionals of a new wave of attacks that allow identity thieves to file fraudulent tax returns by remotely taking over practitioners’ computers.

As part of the Security Summit effort, the IRS urged tax professionals to review their tax preparation software settings and immediately enact all security measures, especially those settings that require usernames and passwords to access the products.  The IRS is aware of approximately two dozen cases where tax professionals have been victimized in recent days.

 

More....https://www.irs.gov/uac/newsroom/irs-warns-of-a-new-wave-of-attacks-focused-on-tax-professionals

[Terry D EA]

Here's how you stop this crap TOTALLY!!. Unplug the friggin computer from the internet!. I guess the best practice would be to prepare off line and only go online when it is time to transmit. I already work off of more than one computer so, use one for research and the other for preparing and transmitting. Of course, there is software updating; etc. Add additional tasks such as random changing of router passwords including guest networks as well. Then frequent software password change. What a PITA!!!

[Abby Normal]

On 9/18/2016 at 6:43 AM, Terry D said:

Unplug the friggin computer from the internet!

Totally not feasible. No email, no online backup, no research, etc. When the internet goes down, we're not quite dead in the water, but we are severely limited.

[Jack from Ohio]

On 9/18/2016 at 6:43 AM, Terry D said:

Here's how you stop this crap TOTALLY!!. Unplug the friggin computer from the internet!. 

Why not just go back to hand creating all the returns on paper and using a typewriter for all communications?  That is also, with the same amount of feasibility, stop the hacking crap. 

I found a fossil when cleaning out my deceased dad's office on Saturday.  A brand new, unopened package of carbon paper.  If you go back to hand producing using paper forms, this may be worth its weight in gold!!

[Catherine]

51 minutes ago, Jack from Ohio said:

 A brand new, unopened package of carbon paper.

At least one office supply company still sells it; I bought a new package of 100 sheets just a couple of months ago.  We use it in our pistol matches to make two copies of the score sheet at once.

[Abby Normal]

I do miss the smell of NCR paper. Aaaaaahhhh! Oh, and mimeograph sheets that we used to get in school where the print was purple. Good times!

[Elrod]

[jklcpa]

Getting back to the original subject, the IRS released IR 2016-119 today pertaining to Practitioner Data Security.

You can search for it on the IRS site as I did after receiving an email from the IRS' Philadelphia Stakeholder Liason, Stephen Connor, who sent out the IR as a Word doc to be downloaded.  Just a touch of irony there.  The thing is that this was a one-page statement that was certainly short enough that it could have been included in the body of the email.

[Terry D EA]

On ‎9‎/‎19‎/‎2016 at 9:59 AM, Abby Normal said:

Totally not feasible. No email, no online backup, no research, etc. When the internet goes down, we're not quite dead in the water, but we are severely limited.

In my original post I said 'working off of two computers" I totally agree that not having access to e-mail, internet etc.; is detrimental to our practice. That is why I stated to use one computer that stays off line until it is time to update and transmit. That can limit the hacks. It is a shame that technology is such a wonderful tool that has made our jobs easier but at the same time has allowed the crooks of this world to use it in a manner that it wasn't intended for.

[Elrod]

I agree with you 100% Terry..........

Praying, for the day it will be better.

[David1980]

I still suspect that while some of this does happen probably more of what's actually happening is bad preparers are denying filing fraudulent returns. It's nothing new, but with the additional ID theft data the IRS is collecting it probably changes the bad preparers stories. Before, the IRS would inquire about a bunch of fraudulent returns that were sent by an EFIN and the ERO would claim they didn't efile those returns. IRS assumes EFIN was compromised and shuts down the EFIN and issues the ERO a new one. Now with the ID theft data, the ERO makes the same claim and the IRS responds "But it was your computer." Thus the bad preparer is going to claim someone must have remotely controlled their computer to submit the bad tax returns that way.

At that point, the IRS can either call ERO a liar or they can accept the story. Given budgets and costs I'd bet most of the time it's not in the IRS best interest to try to build evidence and argue and so they instead accept the bad preparers claim that someone remotely controlled their computer to file the fraudulent returns. Resulting in IRS warnings to the community that hackers are targeting preparers and submitting bad returns that way.

That said, the possibility of a hack scares me that I'm paranoid about security on any computer with tax data. Not because I'm worried about someone filing fraudulent returns through my computer but rather because I'm worried about someone obtaining taxpayer data from my computer. The IRS warnings might cause some people to improve computer security which is absolutely a good thing. There's no down side to the warnings.