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Safeguarding Taxpayer Data – How to Get Started | Business

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Safeguarding Taxpayer Data – How to Get Started
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Tax professionals must safeguard taxpayer data by law. It is also critical to tax preparers’ business success. Protect your clients and yourself by taking a few common sense steps.

You can seek advice from security consultants or insurance companies. IRS Publication 4557, Safeguarding Taxpayer Data, also offers tips on how to get started.

These best practices include:

  • Take responsibility yourself or assign someone to be responsible for safeguards;
  • Assess the risks to taxpayer information in your office. Make sure to include your operations, physical environment, computer systems and employees, if applicable;
  • Make a list of the locations where you keep taxpayer information (computers, filing cabinets, and containers taxpayers may bring you);
  • Write a plan of how to safeguard taxpayer information. Put appropriate safeguards in place;
  • Use service providers who have policies to maintain an adequate level of information protection; and
  • Monitor, evaluate and adjust your security program as your business or circumstances change.

To safeguard taxpayer information, determine the appropriate security controls for your environment based on the size, complexity, nature and scope of your activities. Security controls are the management, operational and technical safeguards you may use to protect the confidentiality, integrity and availability of your customers’ information.

Examples of security controls include:

  • Locking doors to restrict access to paper or electronic files
  • Requiring passwords to restrict access to computer files
  • Encrypting electronically stored taxpayer data
  • Keeping a backup of electronic data for recovery purposes
  • Shredding paper containing taxpayer information
  • Removing sensitive or personal information before mailing items

This is one in a series of special security awareness tax tips for tax professionals. The “Protect Your Clients; Protect Yourself” campaign’s goal is to raise awareness among tax professionals. It is an initiative of the Security Summit, a joint project by the IRS, states and the tax community to combat identity theft. Because of the sensitive client data held by tax professionals, cybercriminals increasingly are targeting the tax preparation community.

This information is not intended to be a substitute for specific, individualized tax advice as individual situations will vary.  Royal Alliance Associates, Inc., Georgetown Capital and its advisors are not engaged in rendering tax advice.

These links are provided as a convenience and for informational purposes only. We assume no liability for any inaccuracies, errors or omissions in or from any data or other information provided on the pages, or for any actions taken in reliance on any such data or information.

Prepared by the IRS.  For more information go to www.irs.gov.

Securities and investment advisory services may not be available in all states.

Representatives offer Securities and Advisory Services through Royal Alliance Associates, Inc., member FINRA/SIPC and a registered investment advisor.

Insurance services offered through Georgetown Capital Group, which is independent of Royal Alliance Associates, Inc. with separate ownership, and is not registered as a broker-dealer or investment advisor.

 Joseph V. Curatolo, President of Georgetown Capital Group

5350 Main Street, Williamsville, NY 14221

Phone #(716) 633-9800  Toll Free 1 (800) 648-8091  Fax #(716) 633-9789



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