Top Security Threats for Tax Preparers Right Now

Tax professionals are under constant assault from cybercriminals who understand the extraordinary value of the data these practitioners handle. From Social Security numbers and financial records to employer identification numbers and banking information, a tax preparer's systems contain everything needed to commit identity theft, tax fraud, and financial crimes on a massive scale. Understanding the specific threats targeting your practice is essential to building an effective defense.

1. Ransomware Attacks

Ransomware encrypts your files and demands payment for the decryption key. For tax professionals, this means losing access to every client record, tax return, and business document simultaneously. Attackers know that tax practices are under tight deadlines and may be more willing to pay quickly to restore operations. Ransomware attacks against tax professionals spike during tax season when the pressure to meet filing deadlines is greatest.

Prevention includes maintaining tested offline backups, deploying EDR solutions that detect ransomware behavior, keeping all software updated, and training staff to recognize the phishing emails that typically deliver ransomware.

2. Phishing and Spear Phishing

Phishing remains the most common initial attack vector. Generic phishing campaigns cast a wide net, while spear phishing targets specific individuals with personalized messages. Tax professionals receive phishing emails impersonating the IRS, tax software vendors, clients, and financial institutions. During filing season, the volume of these attacks increases dramatically.

Prevention requires email filtering technology, regular security awareness training, phishing simulation exercises, and technical controls like DNS filtering that block access to malicious sites.

3. Business Email Compromise (BEC)

BEC attacks involve compromising or spoofing a trusted email account to manipulate the victim into transferring money or sensitive data. In a tax context, an attacker might compromise a client's email and send a request to change refund direct deposit information, or they might impersonate a firm partner and instruct staff to send client data to an external email address.

Prevention includes implementing email authentication protocols (DMARC, DKIM, SPF), establishing verbal verification procedures for any changes to financial information, and training staff to recognize BEC tactics.

4. Credential Theft and Account Takeover

Attackers steal login credentials through phishing, keylogger malware, or by purchasing credentials exposed in data breaches. Once they have your tax software credentials, they can access your entire client database. If they obtain your IRS e-Services credentials, they can compromise your EFIN and file fraudulent returns under your identity.

Prevention includes using unique, strong passwords for every account, enabling multi-factor authentication everywhere, monitoring for compromised credentials on the dark web, and deploying endpoint protection that detects keylogger malware.

5. Insider Threats

Not all threats come from outside your organization. Current or former employees, contractors, or business partners with access to your systems can intentionally or accidentally compromise client data. A disgruntled seasonal preparer who copies client files before leaving, or an employee who falls for a phishing email, can cause just as much damage as an external attacker.

Prevention includes implementing least-privilege access controls, promptly revoking access when employees depart, monitoring user activity for unusual behavior, and conducting background checks on staff with access to sensitive data.

6. Remote Desktop Protocol (RDP) Exploitation

Many tax practices use Remote Desktop Protocol to allow remote access to office computers. Exposed RDP services are a favorite target for attackers, who use brute force attacks or stolen credentials to gain access. Once inside via RDP, attackers have the same access as if they were sitting at your computer. RDP is one of the top three initial access vectors in ransomware attacks.

Prevention includes disabling RDP if not needed, using a VPN to access RDP rather than exposing it to the internet, enabling Network Level Authentication, implementing account lockout policies, and monitoring RDP login attempts.

7. Malware Through Tax-Related Documents

Tax professionals routinely receive documents from clients via email. Attackers exploit this by sending malware-laden files disguised as W-2s, 1099s, prior-year returns, or other tax documents. These files may contain macros that execute malicious code when opened, or they may exploit vulnerabilities in PDF readers and office applications.

Prevention includes using secure client portals instead of email for document exchange, scanning all attachments with endpoint protection before opening, disabling macros in Microsoft Office by default, and verifying unexpected documents with the purported sender via phone.

8. Wi-Fi Eavesdropping

Unsecured or poorly secured wireless networks allow attackers to intercept data transmitted over the network. If your office Wi-Fi uses weak encryption or a shared password that has not been changed in years, an attacker in a nearby car or building could intercept client data as it moves across your network.

Prevention includes using WPA3 encryption (or WPA2 at minimum), using a strong, unique Wi-Fi password, separating guest and business networks, and using a VPN for all sensitive transactions.

9. Physical Theft and Loss

Stolen laptops, lost USB drives, and break-ins at tax offices result in data breaches that must be reported under state notification laws. A single stolen laptop containing unencrypted client data can affect hundreds or thousands of taxpayers.

Prevention includes encrypting all devices and removable media with full-disk encryption, enabling remote wipe capability on laptops and mobile devices, implementing physical security controls at your office, and avoiding storing client data on portable devices whenever possible.

10. Supply Chain Attacks

Attackers compromise a software vendor or service provider that your practice relies on, using that access as a pathway into your systems. If your tax software vendor, cloud storage provider, or IT service company is breached, the attackers may gain access to your data through the trusted connection between your systems and theirs.

Prevention includes vetting the security practices of all vendors and service providers, limiting the access granted to third-party software and services, monitoring for unusual activity from vendor connections, and maintaining your own backups independent of vendor systems.

Defend Against All Ten Threats

No single tool or practice eliminates all of these threats. Effective cybersecurity requires a layered approach that addresses each attack vector with appropriate controls. Bellator Cyber Guard provides comprehensive threat protection designed specifically for tax practices, covering every threat on this list with the technologies, monitoring, and expertise needed to keep your practice secure. Contact us at guard@bellatorit.com to assess your vulnerability to these threats and build a defense strategy that works.