RISK MANAGEMENT

Safe Harbor Compliance Reduces Risk of Fines and Penalties

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Protect your clients–and your firm–by being proactive.

By Donny Shimamoto, CPA, CITP, CGMA

In the last few years, we’re starting to see state legislatures and attorney generals recognizing that tax practitioners are trying to protect their clients. They are formalizing this recognition with changes to regulations or laws to include “safe harbor” provisions that limit or eliminate the fines and penalties for tax practitioners who take proactive action to manage their cybersecurity risks.

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As of December 2022, the following states have some type of safe harbor provision in place:

In contrast, states like California and Colorado are taking the opposite approach and penalizing organizations that have data breaches.[iv]

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Three Fundamental Questions to Ask in Audit

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Are you teaching your team the real work or just the compliance work?

By Alan Anderson, CPA
Transforming Audit for the Future

Instant download:
“The New Manifesto for Accountants.“

When I started in accounting, we wrote audit programs out by hand, and we thought about what it was we needed to do to carry out our audit procedures.

And then, the firm got a copy machine. That started the arts and crafts period of public accounting.

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Because we were going to do the same as last year, every year we would make a copy of last year’s hand-written audit program, cut out the sign-offs, tape that on a new page, make sure to draw the lines for the sign-offs, and then we’d make a copy of that. Then we had our audit program for the new year.

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The Life Insurance That Your Firm Needs

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https://cpatrendlines.com/2020/04/06/accountants-are-emergency-responders-who-will-help-us-recover-from-the-covid-19-crisis/

Guarantee funding when your business needs it the most.

By Russ Alan Prince
Your $5 Million High-Net-Worth Practice

There are times because of death when key people in a company are lost. Key person life insurance provides funds to a business to address the financial losses that can occur when a key person dies.

MORE: Why You Need a Team of Experts | Why a Virtual Family Office? Why Now? | Is Your Client’s Umbrella Big Enough? | Your Client’s Instincts Are Wrong | Preserving Wealth Is a Different Mindset | Three Approaches to Investment Consulting
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Revenue losses can be offset, and money can be tapped to help ensure the business remains viable and doesn’t fail – for example, to find a replacement or train someone to take the job of the key person who died.

This is almost always the most cost-effective approach. Additionally, key person life insurance pretty much guarantees the money required will be available when needed.

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Cybersecurity for Tax Professionals

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Welch

CHECKLIST: The 24 steps to prevent and, if necessary, respond to breaches.

By Amy Welch

Last year, there were nearly 90,000 reports of tax identity theft, according to the Federal Trade Commission.

In fact, in June, an IRS agent admitted to stealing someone’s identity. Law360.com reported Special Agent Bryan Cho, 49, pled guilty to aggravated identity theft and wire fraud in a Brooklyn district court. It appears anyone can be a criminal!

Join Donny Shimamoto, CPA, CITP, CGMA, for “Hybrid Work: Holistic Approach to Customer, Employee & Cybersecurity Risks,” Aug. 26, 3:30 pm ET. Register Here | Learn More

It’s also important to note that protecting taxpayer data is the law. According to the FTC Safeguards Rule, “tax return preparers must create and enact security plans to protect client data. Failure to do so may result in an FTC investigation.” Additionally, any “failures that lead to an unauthorized disclosure may subject you to penalties under sections 7216 and/or 6713 of the Internal Revenue Code. READ MORE →