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IRS boosting security: How can you also protect your data?

The Wall Street Journal reported that as early as next week, the Internal Revenue Service will announce an agreement with tax preparation companies designed to strengthen the tax system. It will likely involve improved authentication of those who file tax returns and strengthen the industry’s ability to identify broad fraud and communicate concerns to the agency.

In a Senate Committee meeting on Tuesday, lawmakers said they would also push legislation containing more tools to help the agency battle tax fraud. IRS Commissioner John Koskinen suggested that a legislative change to speed employer timelines for submitting employee wage and tax information could help. He also stated there is “no magic silver bullet that is tomorrow morning going to put this all to an end.”

These efforts come after a data breach that affected 100,000 taxpayers, which we discussed in detail in a blog post last week. At the Senate hearing, the inspector general for the IRS, J. Russell George, listed “the top concern facing the IRS” as the security of taxpayer data. As the agency moves to strengthen it's systems, you can also take steps to secure your data.

Make your personal information safer

Several of the tips recently offered by the New York Times contain convenience trade-offs, but stronger protection. Here a couple of the suggestions:

  • Use multifactor authentication – This feature requires two-factor authentication (usually a code sent via text) whenever you sign in from a new computer
  • Create stronger passwords – Changing your passwords is important and they should be passwords you have not used before. An anagram based on a saying or lyric is one way to create a truly unique password – i.e. a line from The Beatle’s song The Taxman “If you take a walk, I’ll tax your feet” could become IyTaWiTyF.
  • Monitor your credit – If you discover an issue then request to freeze your credit.

With companies and now federal agencies succumbing to more sophisticated cyberattacks, it is even more important than ever to remain vigilant and take steps to protect your accounts. If you learn that your tax transcripts were accessed, you may also want to speak with an attorney to discuss concerns and available remedies.

Source: New York Times, “Five Steps to Secure Your Data After I.R.S. Data Breach,” Nicole Perlroth, May 26, 2015

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