Keeping Taxpayer Data Secure

3 Credits: Taxes


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Keeping Taxpayer Data Secure

Course Level
CPE Credits

3 Credits: Taxes

Course Description

The annual global cost of cybercrime is high and getting higher all the time. In fact, cyber criminals reap a windfall from their activities that is estimated to have been $450 billion in 2015 and is anticipated to climb to an annual $10.5trillion average by 2025. In the United States alone, the FBI received reports of 791,790 complaints involving $4.2 billion in 2020.  Almost all of that cybercrime began with—and continues to start with—a social engineering concept known as “phishing.”

Certain business organizations, among which are those referred to as “financial institutions,” are charged by the FTC with taking particular steps to protect their customers’ financial information. Included in the category of financial institutions are professional tax preparers. Professional tax preparers normally maintain a significant amount of taxpayer information in various files—electronic and paper—that would be a treasure trove for cyber criminals.

In this course, tax preparers are introduced to the problem of cybercrime and its costs, offered methods that can be expected to reduce the chances of becoming a cybercrime victim, and informed of proper steps to take if they do become victims of cybercrime. Accordingly, it will examine cybercrime and will discuss:

  • The extent of the cybercrime problem;
  • The potential costs to a tax preparer whose taxpayer data have been breached;
  • The best practices a tax preparer may implement to avoid becoming a cybercrime victim; and
  • What a tax preparer should do if its taxpayer data has been breached.
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Learning Objectives

After completing this course, you will be able to:

Chapter 1

  • Identify the source of the most frequent type of malicious access to a firm’s taxpayer information;
  • List the most common types of cyber attack;
  • Describe how a denial-of-service attack operates to impede business operations; and
  • Recognize the dangers of Trojan horses.

Chapter 2

  • List the principal federal laws and regulations governing the security of taxpayer information;
  • Understand the objectives and requirements of the Safeguards Rule;
  • Identify the notification requirements imposed by the Financial Privacy Rule; and
  • Distinguish between a customer and a consumer under FTC regulations.

Chapter 3

  • List the principal causes of a data breach involving customer records;
  • Identify the investigation and remediation activities normally undertaken by an organization following a data breach involving customer information;
  • Recognize the average costs of a data breach in the United States; and
  • Understand the probability of a business experiencing a data breach within the next 24 months.

Chapter 4

  • Recognize the function of a firm’s Information Security Plan;
  • List the principal sections of an Information Security Plan;
  • Identify the role of an Information Security Plan’s physical security procedures; and
  • Describe the elements comprising a firm’s information and computer system.

Chapter 5

  • List the data use and retention areas generally vulnerable to unauthorized access of taxpayer information; and
  • Identify best practices for securing taxpayer information.

Chapter 6

  • Identify the steps that should be taken by a business to stop or limit additional data loss if a data breach has occurred involving its clients;
  • Recognize the need for a comprehensive communications plan;
  • List the entities that should be notified in the event of a data breach; and
  • Identify the additional protections that may be recommended if a data breach involves the compromise of clients’ Social Security numbers.
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Course Specifics

Course ID
Revision Date
February 6, 2024

There are no prerequisites.

Advanced Preparation


Number of Pages

Compliance Information

NASBA Provider Number: 103220
IRS Provider Number: 0MYXB
IRS Course Number: 0MYXB-T-02442-24-S
IRS Federal Tax Law Credits: 3
CTEC Provider Number: 2071
CTEC Course Number: 2071-CE-1881
CTEC Federal Tax Law Credits: 3

CFP Notice: Not all courses that qualify for CFP® credit are registered by Western CPE. If a course does not have a CFP registration number in the compliance section, the continuing education will need to be individually reported with the CFP Board. For more information on the reporting process, required documentation, processing fee, etc., contact the CFP Board. CFP Professionals must take each course in it’s entirety, the CFP Board DOES NOT accept partial credits for courses.

CTEC Notice: California Tax Education Council DOES NOT allow partial credit, course must be taken in entirety. Western CPE has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, by phone toll-free at (877) 850-2832, or on the Internet at

Meet The Experts

Paul J. Winn

Paul J. Winn CLU ChFC is a writer with more than 30 years experience in the life insurance and securities industry as an agent/registered representative, an agency head, a marketing vice president for a life insurance company and the president of a corporate registered investment adviser. He was a long serving member of the advisory board to the New York State insurance department. He is a published book author and creator of more than 200 taxation, insurance and securities training courses.