Nearly half of IRS-approved free tax preparers fail cybersecurity audit


The Online Trust Alliance, a nonprofit based out of Bellevue, Washington, audited tax-preparation companies and found that 6 out of 13 online tax-preparation and filing services listed on the website are not doing an adequate job of protecting customers’ security. 

Read more: Beware of these common IRS scams

Seven firms on the ‘Honor Roll’ — six firms fail

These companies are part of the IRS’s Free File Alliance, which offers free tax-preparation services for people with an adjusted gross income of $62,000 or less. 

Seven firms were on the ‘Honor Roll’ when it came to cyber security and protecting users’ data, while the other six failed the audit. 

Nearly half of IRS-approved tax preparers fail cybersecurity test


The listed companies help as many as 100 million taxpayers file returns, but the findings are relevant for all customers of each tax filling service, according to the Online Trust Alliance, an organization with a mission to help protect Internet users’ security, privacy and identity.

‘As the report rightly notes, the areas of security and privacy are evolving daily,’ said the IRS said in a statement. The IRS also plans to ‘encourage tougher standards,’ for companies that missed the mark. 

The audit rated each company in these three categories: consumer protection, site security and privacy. The report also discovered that three of the firms on the ‘failed’ list did not have adequate security measures in place against well-known vulnerabilities that criminals had taken advantage of in the past. In addition, five of the tax preparation companies had not yet adopted simple and free security protocols that are considered standard by 100 top online retailers.


‘The IRS expects more than 120 million returns to be filed electronically this year, so it’s troubling that any of these approved tax-filing firms aren’t addressing security basics,’ said Craig Spiezle, Founder & President of OTA.

Read more: The fake IRS phone scam is back!

Companies on the ‘Honor Roll’ list hacked

This information falls on the heels of some very big tax security breaches. Just this month, criminals made 464,000 attempts at gaining information from the IRS that would help them steal tax refunds. According to the IRS, 101,000 were successful. Cyber criminals stole 330,000 taxpayers’ personal information from the IRS’s ‘Get Transcript’ database in 2015. 

In addition, two companies on the ‘Honor Roll’ list, TaxAct and TaxSlayer, LLC were breached by criminals that used information stolen somewhere else. 

With this in mind, you can never be too careful when it comes to protecting your identity during tax season.

If you’re concerned about your identity this tax season, be sure not to use a company on the ‘failed’ list above, and beware of cybercriminals’ tactics to try to steal your money and identity. You also might want to consider doing a credit freeze

Read more: LifeLock is legit, but is it worth your money?

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