CPA Security: Key Ways To Prevent Tax Return Fraud

As small business owners, investors, and individuals, we trust our CPAs with our financial futures. Indeed, a good CPA can help you navigate an audit, choose smart investments, …

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As small business owners, investors, and individuals, we trust our CPAs with our financial futures. Indeed, a good CPA can help you navigate an audit, choose smart investments, and identify all the right deductions. But not every relationship with your CPA will leave all parties unscathed. If your tax preparer gets caught in one of the major IRS scams going around, you could both face real problems.

Though you can’t keep your CPA from making every misstep leading to tax preparer fraud, there are several steps you can take to keep you both on this side of the law – and out of reach of schemers. Talk to your tax preparer about these serious concerns. Just because tax season is over, doesn’t mean either of you can rest.

The Shape Of Return Preparer Fraud

In some cases of tax return preparer fraud, the cause is an unscrupulous CPA who freely participates in identity theft or other forms of refund fraud.  These are the worst cases because there’s almost nothing you can do to prevent it. You’re at the mercy of another person’s lack of ethics.

The more common scenario you may find yourself facing alongside your tax preparer is one in which your CPA was just as unsuspecting as you were – and they were hit by a scam. Phone scams, in particular, have taken hold this season and can leave your information at risk.

Ask About IRS Warnings

Under ideal circumstances, your CPA should preemptively warn you about current tax scams; for example, those targeting individuals with limited English proficiency or the robocall scams hitting taxpayers across the nation. If you haven’t heard anything from your tax preparer, however, it could mean that they’ve been so busy filling out forms and double-checking deductions that they haven’t heard. They may also have overlooked telling you, though they’re well aware of the concerns.

Since the IRS has issued official warnings about most of these scams, ask your CPA to outline what’s going on for you and ask what scams are impacting tax preparers. If they don’t know about back-end scams affecting tax preparation systems or other attempts to defraud taxpayers through their CPAs, talk to them about your concerns.

Bridge The Gap

Have you contacted your payroll department this tax season looking for information about W-2s or withholdings? If so, you may find your department less prepared around tax information than you’d like, so see if you can help them bridge the gap. You CPA might be able to teach your payroll department about phishing scams in which someone impersonates management or HR in order to steal information. Talking about this topic as an educator can encourage your tax preparer to study up on some of the other scams out there. Payroll departments aren’t the only ones subject to impersonation-based phishing.

One current phishing scam affecting tax preparers is hidden behind the name of a real educational company, but its success hinges on a lack of digital literacy. Emails request preparer information – to a degree that anyone should be suspect. The list ranges from sign-in and password information to security questions, social security numbers, and more. It’s not unlike the phishing scams hitting payroll departments and too many CPAs are falling for it.

Tax preparer fraud and scams can spell disaster for your finances so don’t let the topic go without discussion. You don’t want to be the subject of identity theft because you hesitated to ask the question.

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