By Mark Hodges, CPA, CFP®, Tax Senior Manager
Identity Theft: A Business Risk, Not Just a Personal One
Identity theft is not just a personal problem anymore, it is a growing threat to businesses, partnerships, estates, and trusts. Criminals target sensitive business information to file fraudulent tax returns, claim refunds, or commit other financial crimes.
Unlike individual identity theft, business identity theft can go unnoticed longer and cause widespread damage. A stolen EIN, employee data breach, or compromised tax filing can disrupt operations, delay refunds, and trigger costly compliance issues.
The good news? Knowing the warning signs and taking proactive steps can significantly reduce your risk this tax season.
Know the warning signs of business identity theft
Be on alert if you experience any of the following:
- You are unable to e-file a return because one has already been filed using the same EIN or SSN
- A routine extension request is rejected due to a duplicate EIN or SSN on file
- You receive an unexpected IRS notice or tax transcript that does not match anything you submitted
- You receive IRS Letter 6042C or Letter 5263C
- You stop receiving expected IRS correspondence because your business address was changed without your knowledge
Any of these could indicate fraudulent activity and should be addressed immediately.
What to do if you suspect identity theft or data loss
If you believe your business identity or employee data has been compromised, reach out to your Keiter team member as soon as possible. Fast reactions to these situations help to limit damage and speed up resolution.
Prevention Tips for the 2025/2026 Tax Season
Strong prevention starts with smart habits and informed employees.
- Set up a Business Tax Account (BTA)
You can pay taxes, view records, get messages, and do more with a secure, online Business Tax Account set up through the IRS portal.
Who Is Eligible?
- Sole proprietor
- Partnership
- S corporation
- C corporation
- Single-member limited liability company (LLC)
- Coming soon: Government entities and tax-exempt organizations
How to set up your BTA
Visit the IRS website to create or sign-in to your ID.me account.
If online enrollment is not successful, alternative options are available, including filing an application or requesting in-person authentication. These methods take longer, so early planning is recommended.
- Take basic security measures
- Use strong, unique passwords and multi-factor authentication
- Regularly update software and security systems
- Limit access to sensitive data to only those who need it
- Adopt/Follow a data security plan
A documented data security plan helps protect tax and financial information and ensures your business responds quickly if a breach occurs.
- Educate your employees
Employees are often the first line of defense against cyber threats. A recent IBM study found that 36% of data breaches began with an employee, underscoring the importance of providing regular security awareness training to employees. Our Risk Advisory Services team can assist by delivering a training session that addresses common threats such as phishing emails, W-2 scams, and details safe data handling practices to reduce the risk of costly mistakes.
- Keep EINs secure
Treat your EIN like a Social Security number. Store it securely and share it only when absolutely necessary.
- Always respond immediately to IRS correspondence.
Delays can slow processing and increase complications.
- Perform a Cybersecurity Risk Assessment
Organizations often concentrate cybersecurity efforts on technology, while overlooking the people, processes, and controls that are critical to an effective cybersecurity program. Keiter’s Risk Advisory team can perform a cybersecurity risk assessment that evaluates key risks, identifies existing controls, assesses control gaps, and provides practical recommendations to strengthen your overall cybersecurity posture.
Remember: What the IRS will never do
To avoid scams, keep these reminders in mind. The IRS will never:
- Initiate contact by email, text, or social media to request personal or financial information
- Call with threats of lawsuits, arrests, or immediate payment demands
- Call, email, or text to request identity protection PINs
If you receive a message like this, it is a scam.
Stay vigilant this tax season
Identity theft prevention is not a one-time task. It is an ongoing process. Taking proactive steps now can help protect your business, your employees, and your financial future throughout the 2025/2026 tax season and beyond.
Keiter prioritizes the security of our clients’ business data through leading edge technology and comprehensive information security services ensuring secure transmission of tax returns and documents.
If you have questions about safeguarding your data or responding to IRS notices, our team is here to help. Reach out before a small issue becomes a major disruption. Contact your Keiter Opportunity Advisor| Call 804.747.0000| Email
About the Author
Mark Hodges, CPA, CFP®, Tax Senior Manager
To assist his clients in meeting their goals and objectives, Mark takes a team approach – working collaboratively with his clients, their other advisors, and legal counsel. He also specializes in identifying and helping to implement trust and estate planning opportunities for his clients. Mark is a member of Keiter’s Private Client Services team.
More Insights from Mark HodgesThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
