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Tuesday July 7, 2020
Data Security Requirements for Tax Preparers
During tax year 2017, the IRS reported that 80 million tax returns were filed by professional tax preparers. About 56% of taxpayers needed the assistance and advice of a professional tax preparer.
If you are in the majority of taxpayers who use a professional tax preparer, you benefit from the efforts of the IRS and the Federal Trade Commission (FTC) to protect your personal tax information. In IR-2019-131 the IRS offered tips to tax preparers on ways to safeguard client information.
"Protecting taxpayer data is not only a good business practice, it is the law for professional tax preparers," IRS Commissioner Chuck Rettig stated. "Creating and putting into action a written data security plan is critical to protecting your clients and protecting your business."
The FTC requires all tax preparers to comply with the "Safeguards Rule." While the scope and complexity of a plan will relate to the size of the tax preparation organization, all tax preparers must have a written data security plan.
The plan must include the following five components:
Published July 26, 2019