Jul 13 Protecting You and Your Clients from Data Theft
Published in conjunction with S2 Technology Solutions and Sax’s State and Local Tax (SALT) Practice
To state the obvious, the business world has undergone a substantial change relating to reliance on technology, cloud storage, data management, operational security, etc., from 20 to 30 or more years ago. On that note, on July 11, 2022, the California Franchise Tax Board (“FTB”) published best practices for taxpayers on how to protect their proprietary information and steps to take to mitigate future issues. Protecting data becomes more and more important as companies continue to expand their State and Local Tax footprint and accumulate more sensitive data than ever before.
Protecting You and Your Clients from Data Theft
Businesses today hold vast amounts of very important information using technology, information that can be used to perpetuate a multitude of crimes. This is especially important for businesses that store and maintain sensitive information, whether that information relates to customer accounts or proprietary intellectual property. Data crime is heavily focused on databases that provide a “target-rich source” of information, which describes probably greater than 90% of businesses today.
The FTB recently released a publication that references Federal best practices (specifically IRS Publication 4557, Safeguarding Taxpayer Data). The current guidelines contained therein provide the following suggestions:
- Install anti-malware/anti-virus security software on all devices (laptops, desktops, routers, tablets, and phones) and keep software set to update automatically
- Perform frequent routine deep scans of your network and computers to identify any malware/virus infections
- Use strong passwords to access computers and client files. Strong passwords typically include a combination of letters, numbers, and symbols.
- Learn to recognize and avoid phishing email schemes
- Check IRS e-Services account weekly for the number of returns filed with your Electronic Filing Identification Number (EFIN)
Although useful at a high level, the steps above will not guarantee that you will not be attacked, locked down, and held hostage by a new wave of highly technical and computer-literate criminals.
The information provided by the FTB is a good springboard to start thinking about these issues and, more specifically, about operational technology security. One thing is for sure: if you start running into or notice these issues, then it may be too late to avoid a costly and time-consuming situation. At that point, you may find yourself in a situation where you need to learn to convert fiat currency into Bitcoin to pay the ransoms for your data.
If you have any concerns with respect to your company’s technology security profile, or if this is an area that you haven’t focused on, please reach out to your SAX LLP engagement partner or your Sax State and Local Tax team – we can get you connected to our S2 Technology team – a group of technology professionals that can evaluate your risk profile, make suggestions, connect you to hardware and software solutions, and help you roll out a comprehensive multi-faceted operational security solution to keep you out of the fray and keep you, and your valuable and sensitive data secure.