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Tax Developments That Impact Your Business Law Practice

January 17, 2017

Several recent tax developments may impact your business clients. The below summary will point you to more information.

Cyber Threats and Taxpayer Data
On September 2, 2016, the Internal Revenue Service (“IRS”) issued IR-2016-119. The release is a stark warning for tax professionals. There has developed a new wave of cyber threats that allow identity thieves to file fraudulent tax returns by remotely taking over the professionals’ computers. The IRS reports approximately two dozen such attacks already. Practitioners are urged to consult Publication 4557, Safeguarding Taxpayer Data: A Guide For Your Business. There have been recent global headlines with the hacking of the Panamanian law firm, Mossack Fonseca, creating the so-called “Panama Papers.” The political and legal fall-out is still developing. At least one prime minister resigned and countless criminal and civil investigations around the world have been spawned because of the hack and resulting leaks. Tax professionals, business lawyers, and consultants have treasure troves of important client data including names, addresses, social security numbers, financial account names and account numbers, as well as client passwords. The best liability, privacy, and asset protection can be undone in an instant through the soft underbelly of an unsuspecting accountant or lawyer’s website. Unraveling the nuisance with the IRS can be mind-numbing, but the business damage can have severe consequences.

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