Data Security Planning for Your Atlanta Tax Preparation Business

Centerpoint IT Data Security Planning for Atlanta Tax Preparers

Contact Centerpoint IT for assistance in preparing a data security management plan and for all the IT needs of your tax preparation business in Atlanta.  

If you are a tax preparer in Atlanta, GA, you handle sensitive client data, including names, addresses, social security numbers and financial records. It’s imperative that you have robust data security planning to reduce your vulnerability to viruses and malware. Centerpoint IT understands the regulatory and compliance constraints that financial businesses face. Nowhere is that more relevant than in accounting and tax preparation businesses. Let us help you with your data security management to ensure you don’t fall prey to ransomware and other cyber threats.

What Does the IRS Say About Data Security Management?

According to Section 7216 of the IRS Tax Code, passed in 1971, “ [Section 7216] prohibits preparers of tax returns from knowingly or recklessly disclosing or using tax return information. A convicted preparer may be fined not more than $1,000 or imprisoned not more than one year or both, for each violation.”

Rather than face penalties and lose the reputation you’ve worked so hard to build, let Centerpoint IT consultants help you cover your basis and ensure that your network security strategy adequately protects your customer and company data. The IRS strongly advises professional tax preparers to look at their data security and document their strategy. Moreover, CPA’s and paid tax return preparers are required to do so by law. According to the 1999 Gramm-Leach-Bliley (GLB) Act, the Federal Trade Commission (FTC) has the right to regulate information safeguards for businesses engaged in financial products and services for the public.

What Is the Purpose of a Data Security Plan?

Your firms’ data security plan must:

• Designate an employee to coordinate your information security strategy
• Identify risks to customer information in different areas of your firm’s operation
• Implement safeguards that are monitored and tested
• Ensure outside providers with access to client data have the same safeguard
• Adjust the program as needed following business changes or the results of security testing

Intentionally or unintentionally disclosing data that compromises your clients could result in hefty financial penalties. According to IRS Tax Code Section 6713, “The penalty is $250 for each unauthorized disclosure or use of information furnished for, or in connection with, the preparation of a return. The maximum penalty on any person shall not exceed $10,000 in a calendar year.”

This can quickly build up and threaten your financial standing as an ongoing business.

What Is Required in a Data Recovery Plan?

As part of a robust data security plan, Centerpoint IT helps our clients factor in data recovery in the event of a data breach. This also needs to be mapped out in your written plan.

Part of a recovery plan involves notifying the IRS Stakeholder Liaison right away. Report possible theft of taxpayer data to then directly. Our consultant can help you figure out which local and state authorities need to be notified as well. Also, review your business insurance policy to see if it includes a provision for data theft or the cost of recovery following a data breach.

Contact Centerpoint IT for assistance in preparing a data security management plan and for all the IT needs of your tax preparation business in Atlanta.