In today’s digital world, identity thieves don’t need a crowbar—they just need a password. The IRS, along with its Security Summit partners, recently reminded taxpayers and tax professionals that multi-factor authentication (MFA), Identity Protection PINs (IP PINs), and IRS Online Accounts are critical safeguards against tax-related identity theft.
For small business owners, the stakes are especially high. A single breach can compromise client trust, damage reputations, and even expose your company to costly penalties.
At Accounting Complete, we know that protecting sensitive information is just as important as keeping your books balanced. Let’s break down what the IRS is urging and why it matters to you.
Multi-Factor Authentication: More Than a Suggestion
Multi-factor authentication is no longer just a best practice—it’s the law. The Federal Trade Commission’s (FTC) safeguards rule requires all tax professionals and businesses that handle sensitive financial information to use MFA.
How MFA Works:
- Something you know: A password or PIN.
- Something you have: A device that receives a unique code, like your phone.
- Something you are: Biometric data such as a fingerprint or face ID.
This combination makes it significantly harder for hackers to break in. Even if a password is stolen, a second layer of authentication often stops them cold.
Best Practices for MFA:
- Use MFA across all platforms, not just your tax software.
- Evaluate your current MFA methods regularly and upgrade as needed.
- Never share usernames or passwords with others.
Simply put, MFA is your digital deadbolt—and ignoring it could lead to an FTC violation and a breach of client trust.
The IRS Identity Protection PIN (IP PIN)
One of the IRS’s most effective tools for protecting taxpayers is the Identity Protection PIN. This six-digit number is known only to you and the IRS. It prevents fraudsters from filing a false tax return using your Social Security number.
Key Facts About the IP PIN:
- It changes every year.
- Only taxpayers can obtain their own IP PIN—it can’t be requested by a tax professional.
- The IRS will never call, email, or text asking for your PIN.
Enrolling is voluntary, but strongly recommended. Victims of identity theft are automatically issued an IP PIN each year.
👉 Learn how to get your own Identity Protection PIN here.
IRS Online Account and Tax Pro Account
Beyond the IP PIN, the IRS has also rolled out secure online platforms:
- IRS Online Account: Provides secure access to your tax information, prevents fraudulent account creation, and allows safe sharing with your tax professional.
- Tax Pro Account: Enables tax professionals to securely manage client authorizations, request power of attorney, and streamline communication with the IRS.
These tools not only save time but also reinforce your protection against identity theft.
Why This Matters for Small Business Owners
Protecting sensitive data isn’t just about avoiding fraud—it’s about building trust. When clients hand over financial details, they expect you to guard that information with the same care you’d give your own.
At Accounting Complete, we emphasize proactive security because we understand that one weak link can affect the entire chain. That’s why we encourage our clients to adopt measures like MFA and IP PINs—and why we take them seriously in our own practice.
In fact, protecting data is just one of the reasons so many businesses prefer an all-inclusive accounting service. From bookkeeping and payroll to security compliance, having everything managed under one roof reduces risks and streamlines operations. Learn more about the 8 benefits to an all-inclusive accounting service.
Final Thoughts: Security is Everyone’s Responsibility
Cybercriminals aren’t going away anytime soon. But with tools like MFA, IP PINs, and secure IRS accounts, you can dramatically lower your risk of tax-related identity theft.
The IRS and Security Summit have made it clear: protecting your identity isn’t optional. It’s essential.
If you’re unsure where to start—or if you want professional guidance to ensure your business is compliant—our team at Accounting Complete is here to help. We don’t just manage numbers; we protect futures.