How Safe Are Your Tax Secrets? | Ed Slott and Company, LLC

How Safe Are Your Tax Secrets?

By Jim Glass, JD
IRA Analyst
Follow Us on Twitter: @theslottreport
Tax return information is confidential. As the April 17th tax filing date approaches, pay attention to keeping your tax return information out of the hands of those who could cause you harm. 
Protecting Information on Your Tax Return
Your tax return is full of private facts about you and your family. It includes names, Social Security numbers, income, investments, family relationships, business information, and more. 
This makes tax returns a prime target of scammers and identity thieves. If information on your return is stolen, tax season may prove costly in more ways than one.
Congress knows this and has made improper disclosure of tax return information a felony. Government employees can't disclose return information even to other government employees without authorization. The same prohibition applies to others who reveal return information. The penalty can be five years in jail and a $5,000 fine; civil fines, damages, and punitive damages can result as well.
In fact, the IRS and your tax advisor can't even deal with each other without your authorization. If you wish to name someone to receive information in your tax file from the IRS, file IRS Form 8821, Tax Information Authorization. To authorize someone to act on your behalf with the IRS, file IRS Form 2848, Power of Attorney.
Yet most leaks of tax return information start "close to home."  Beware of these potential sources of lost tax information:
  • Your tax return preparer. Because their files hold so many returns, professional return preparers are a natural target of information thieves. These can range from a clerk using a photocopier to sophisticated hackers. When considering hiring a professional return preparer, ask about the firm's privacy and security policies.
  • Your own records. If you keep your tax records in a desk drawer or a personal computer, they aren't secure from anyone. Curious family members, nosy guests, outright intruders may get to them. Keep your tax records secured under "lock and key."
  • Distributing your return. Increasingly, organizations are requesting copies of tax returns on applications of various kinds -- such as when applying for financial aid for school, children's programs, YMCAs and so on.  How will these organizations protect your information? Ask! Don't provide a full return if less information will serve. Ask to have the return sent back to you after the information on it is processed.
Remember the penalties. You can collect them if your information is revealed, and you may be liable for them if you are a member of an organization that loses control of tax return information collected from others!
For help on how to prevent tax return related identity theft, visit the IRS web page on Identity Protection: Prevention, Detection and Victim Assistance.

Receive Ed Slott and Company Articles Straight to Your Inbox!

Enter your email address:

Delivered by FeedBurner


Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to [email protected] for approval.

For white papers/other outflow pieces:
Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:
Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:
Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at [email protected] or (516) 536-8282 with any questions.


Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.

I agree to the terms and services:

You may review the terms and conditions here.