Why Hackers Love Tax Season

Apart from accountants who see an increase in demands for their services, few people enjoy tax season. Opportunistic hackers, however, see love tax season for all the wrong reasons. Data thieves look to steal valuable personal and financial information. Given the scope of those opportunities, hackers may well become strong proponents of tax season.Below are several factors raise the appeal of tax season for hackers:Tax Returns Are Easy to HackCompleting tax forms can be challenging. But weak cybersecurity systems and overworked employees exacerbate data breach risks. In 2015, for example, hackers used an IRS website to access financial records from hundreds of thousand taxpayers! Those records enabled the hackers to file fraudulent returns and to claim multiple refunds. Accountants and Bookkeepers Process High Volumes of Financial InformationClerks and other accounting firm employees receive a higher volume of emails requesting financial information during tax season. Hackers seize this opportunity to slip fraudulent emails into a busy clerk’s inbox. If the employee clicks a phishing link, the cybercriminal gains immediate access to large stores of financial/personal information.Taxpayers Are Wary of the IRSNo taxpayer wants to face an audit. A hacker, posing as an IRS agent, might call or email a taxpayer to request information. The imposter will request sensitive data to complete a return. As a taxpayer, you need to remember that the IRS never contacts taxpayers by telephone or email. Still, many taxpayers respond to these requests out of fear of having their returns audited.The Dark Web Has Created a Platform for Hackers to Buy and Sell Taxpayer DataOne hacker working alone aren’t as effective as hundreds of hackers sharing information to file false tax returns. Hackers can buy stolen taxpayer information on the dark web for as little as $15 per record. Not to mention, these records come along with instructions on how to use that information for illicit financial gains.Individuals have several options to protect themselves against scams during tax season. Professional financial and accounting firms that collect and store client financial data have different levels of exposure. The American Institute of Certified Professional Accountants (AICPA) recommends that accounting firms adopt various strategies to protect themselves during tax season:

1.  Start with leadership buy-in for cybersecurity protection. If upper level management does not take cybersecurity seriously, neither will any other employees of an accounting firm.
2. Maintain a regular cybersecurity awareness program. One-time training will not be as effective as regular reminders of the risks and threats facing an accounting firm.
3. Make an investment in cyber insurance protections. Cyber insurance for accountants protects firms against the financial damages associated with data breach or cyberattack. It’s an inexpensive way to solve an expensive problem.
4. Include cybersecurity awareness in all aspects of an accounting firm’s business. Cybersecurity is not something that should be shuffled off to an information technology department.
5. Test and monitor employee awareness and compliance with cybersecurity protection strategies. Accountants audit their clients’ financial books and records. Likewise, they need to audit their own firm’s cybersecurity protections.
6. Do not shortchange cybersecurity personnel or expertise. Retain outside consultants if in-house expertise is unavailable.
7. Update software and systems regularly. After all, it’s important to maintain up-to-date malware and firewall systems to cover known vulnerabilities.
8. Weigh the advantages of subscribing to software as a service rather than hosting software in-house. Providers of software as a service are more likely to keep their products up-to-date and as secure as is possible.
9. Monitor the information that employees share about the firm on social media platforms. Hackers use those platforms to gain valuable information that they then use to access an accounting firm’s information systems.

Follow the above tips to stay safe during tax season!