As the 2019 tax year approaches, we at Taxware Systems would like to remind tax preparers that protecting taxpayer information is extremely important. This includes protection from environmental risks (e.g. fire, water, tornado, earthquake), business resources (e.g. equipment failure, supply chain disruption, employees) and hostile actors (e.g. hackers, criminals, nation-state actors). The latter has been on the rise in recent years and tax professionals should be prepared for each of these risks.

Protecting your clients isn’t just good business practice, it is mandatory. The Federal Trade Commission’s Safeguards Rule requires all financial institutions to comply with the following:

• • Designate one or more employees to coordinate its information security program
  • Identify and assess the risks to customer information in each relevant area of the company’s operation, and evaluate the effectiveness of the current safeguards for controlling these risks
  • Design and implement a safeguards program, and regularly monitor and test it;
  • Select service providers that can maintain appropriate safeguards, make sure your contract requires them to maintain safeguards, and oversee their handling of customer information
  • Evaluate and adjust the program in light of relevant circumstances, including changes in the firm’s business or operations, or the results of security testing and monitoring

Here are some simple things to implement in your office:

• Keep offsite backups of your client data and ensure that those backups are secure
• Consult with a computer security specialist to evaluate your network security
• Make sure all tax preparers are keeping their computers locked whenever away from their desks. For more information on the FTC requirements click here
  For more information on small business security click here