The increase in cyberattacks on tax professionals this year requires practitioners to take steps to protect client data and computer networks.
Federal law gives the Federal Trade Commission (FTC) authority to set data safeguard regulations for various entities, including professional tax return preparers. According to the FTC Safeguards Rule, tax return preparers must create and enact security plans to protect client data. The IRS created Publication 4557, which includes instructions on how to create a data security plan and basic steps to protect client data.