Tax software in 2021 filing season to offer multi-factor identity protection
Hi, I’m Kay and I’m a smartphone addict.
I carry my phone from room to room in my house. Back pre-COVID-19 when I left my house, if I realized I somehow forgot to pick it up, I had to turn around, regardless of where I was in my journey, and go back and get it.
And its apps are crucial to my coronavirus increased streaming, letting me find out where I saw that “Hey, it’s that guy!” actor before or find out more about a great soundtrack tune.
I am not alone in my dependence on this iteration of Alexander Graham Bell’s invention. The Internal Revenue Service knows that, too. That’s why a phone with texting ability is going to be even more of a part of tax return filing in 2021.
During its recent National Tax Security Week, the IRS and its Security Summit partners announced that all tax software providers have agreed to make multi-factor authentication a standard feature next filing season on their online versions.
Expansion of familiar sign-on system: Most of us who make any kind of electronic financial transactions already are familiar with this process.
It means in most cases that we must take at least two steps to enter information that ensures we do indeed have the right to see the account and/or make any moves involving it.
Generally, you sign in as usual with your user name and password. That’s step one.
But before you get to the site, you also — step two — must enter, for example, a number code sent by text to, you guessed it, your cell phone.
Second layer of online security: The IRS and other institutions that deal with money and personal info are big on multi-factor authentication. It’s one of the best ways to stop identity thieves who constantly are trying to a way into our personal, financial and tax lives.
If you’re like me, you occasionally get a text from some online account with the ID code “you” requested to reset your password so you can sign on to your account. But you didn’t ask for it.
A criminal was taking a chance that his or her attempt to sign on as you would work. And the multi-factor security step stopped them cold.
Even though the identity thief had your log-in name, which still is email in many cases — Note to self: Change, where possible, all email sign-in names — the crook couldn’t use just that to access your account.
That electronic roadblock is why the IRS is pumped about next filing season’s new security option, which will be available to software-using individual taxpayers and tax pros. Which is most of us.
Tax pros’ exponential security needs: The added security is especially critical for tax professionals.
Once identity thieves have access to a practitioner’s networks and tax software account, they can complete pending taxpayer returns, alter refund information and use the practitioner’s own e-filing and preparer numbers to file fraudulent returns.
“This is a dangerous combination,” noted an understated IRS.
Option, not requirement: Yes, this security step will add a few seconds to your filing time next year. Chill. And quit yelling “hurry up!” at your microwave.
If you really just can’t be bothered to take this extra identity protection step, the IRS and Security Summit partners aren’t going to force you. Yet.
This new multi-factor security option is just that: optional. You’ll be able to check the security section of your online tax product account to opt-in to multi-factor authentication. It may be referred to as two-factor authentication or two-step verification or similar names.
Not available on all tax software: And the added security option is limited to online tax preparation only.
If you still buy the companies’ hard-disk, off the store shelf versions to load onto your computer, the multi-factor authentication feature might not be available.
I suspect that will change after the 2021 filing season.
Once a group of taxpayers and pros get used to the system and any issues that might crop up are resolved, the feature will probably become a standard component.
And by then, it likely won’t be optional.
Security is worth the effort: Making it a requirement is a good idea. While the IRS has done a good job in reducing tax identity theft and short-circuiting tax scams in recent years, stolen tax data is still a problem.
Multi-factor authentication is another easy way to prevent taxpayers or tax professional from becoming victims of tax related theft.
So if you use an online tax software product next filing season, opt in to the added security feature.
And if your product version doesn’t offer it, check into adding it yourself.
There are apps for both Apple and Android phones that will generate a temporary, single-use security code, which the user must enter into their tax software to complete authentication. There are also multi-factor authentication solutions that utilize hardware-based, physical security keys.
The tax and ID theft crooks aren’t going to stop trying to steal our info and identities. We shouldn’t stop trying to stop them.
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