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Industry Experts Prepare for Tax Day


April is here, which means Tax Day is right around the corner, and Americans everywhere are getting everything they need to file in order.  While making all of the necessary preparations that the day entails, it's also important to understand the various risks that are associated with tax season.  Online fraud is a fast-growing crime, and during tax season, filers need to be vigilant for the online privacy and safety of their personal data.  Valuable personal information, such as names, addresses and Social Security numbers are stored in tax returns, and it's important to safeguard them as much as possible.

With this in mind, we spoke with technology experts to get their thoughts and advice for companies to follow as Tax Day approaches around security, network uptime and more. 

Alex Fielding, Founder and iCEO at Ripcord

"Accounting firms should not overlook risks from storing vast amounts of sensitive information, such as hard-copy paper tax records as well as digital records housed on hard drives and tape drives, in file rooms and third party facilities. Implementing automated and intelligent solutions for securely collecting, processing, and archiving tax documents is crucial in managing potential risks. Document digitization is an important first step towards automating unsecured processes, achieving compliance with cybersecurity best practices and turning data into actionable intelligence. Digitizing and storing records in a cloud-based records management platform is a safer way to ensure your data's security. Digital records, especially tax information, should be encrypted both in transit and at rest. Sensitive records can be individually password-protected, and access can be restricted to your corporate network, by role and user. Modern, robotic digitization technology that is powered by AI and ML can offer simplicity, new efficiencies and peace of mind for accounting firms responsible for processing, filing and storing large quantities of sensitive tax data."

Neil Barton, CTO, WhereScape

"Business leaders often talk of the ‘time to value' of investment in new projects, and this is especially true in the financial services industry during the busy tax season, where high-performance data results are vital. As the speed of business continues to increase, financial services organizations must shorten the time it takes to unlock the value of data. Automation does just that, and additionally enables companies to redeploy valuable developer resources away from routine data infrastructure management processes and onto value-add tasks, such as delivering new solutions and services that will better guide the business."

Adil Aijaz, CEO and co-founder, Split

"As an engineer, I empathize with the engineers and product managers who work at tax software companies. The extreme seasonality of tax season means they have to plan, design, build and release improvements to their product from April through December without any real user feedback, and then go into lockdown mode to ensure stability from January through April. Any mistake can bring down the product, create a bad customer experience or cause customer churn. 

In such extreme seasonality, it is even more important for these teams to invest in continuous delivery (CD). Most CD conversations are focused on how to get changes into production faster, but what should be equally as important is how to reduce the blast radius of changes and recover faster - especially during peak usage times. In that vein, nothing within CD comes close to the power of feature flags. Flags allow control over features independently of each other. If a particular feature is not scaling with peak traffic, the team can simply turn off the flag and avoid downtime, emergency code rollbacks or hot-fixes.

Engineering for tax software is hard. It becomes easier with a solid foundation of continuous delivery and the ability to instantaneously turn on or off features that could impact tax season."

Trevor Bidle, vice president of information security, compliance officer, US Signal

"With the deadline to file taxes less than two months away, now is the most important time for financial institutions to think about their data security and IT solutions. Customers put their money and their trust in the hands of financial organizations, and they expect their privacy and sensitive information will be safeguarded. That's why these organizations must invest in comprehensive data protection and business continuity plans that provide disaster recovery, off-site backup options that are ransomware-proof and replication services."

Matt Handler, chief revenue officer, WhiteHat Security

"According to Verizon's 2018 Data Breach Investigations Report, 76 percent of cyberattacks are financially motivated, making tax season a ripe time for malicious hackers. WhiteHat research also indicates that many business websites remain always vulnerable every day of the year and account for 34 percent of all data breaches.

Accounting, payroll and other employee benefit websites containing PII - names, addresses, phone numbers, social security numbers - should be on high alert and make security a top priority. Organizations that rely on digital platforms should perform the strictest security tests to detect and fix website, application, API and database vulnerabilities in order to prevent a data breach of sensitive W2 information.

These businesses can go one step further and safeguard data at the source by empowering their web and app developers to adopt security best practices throughout the entire software lifecycle (SLC) and advance their knowledge of new vulnerabilities with ongoing training and certifications."

Jeff Keyes, director of marketing, Plutora

"We all take for granted the luxury of powering up our tax software and accurately calculating our returns and crossing our fingers hoping we don't owe any money. But with intricacies of tax laws and the frequency of change, how does the software we trust to get our taxes right keep up?

Continuous delivery is the key. It ensures that development cycles don't take six months or more, and that they are at peak performance when tax season arrives. Automating the whole software lifecycle keeps releases timely and guarantees quality updates so that early-bird and last-minute filers are using up-to-date software.

With the short window of time for tax software to provide business value, it is also imperative to measure the impact of this continuous delivery to ensure it is also continuous improvement. Gaining rich insights from concept to customer adoption during tax season will provide the foundation for work done during the remainder of the year."

Stephen Moore, chief security strategist at Exabeam

"The Internal Revenue Service (IRS) recently reported approximately $46 million claimed in fraudulent refunds and confirmed 2,204 falsified tax returns involving identity theft. Tax season presents an especially vulnerable time for companies and individuals preparing documents with personal information that's highly valued on the dark web. This year, we can expect cyberattackers to be more aggressive and evolving their methods in creative ways.

Malicious actors use many forms of social engineering and even credential theft, sometimes known as business executive compromise (BEC), to trick people into sharing sensitive W-2 data. HR, payroll, and accounting firms are especially vulnerable, and should take extra precautions to improve their cybersecurity posture and train employees to look out for phishing emails, scam phone calls that impersonate the IRS, or even CEOs and other executives.

Just as adversaries will continually work to penetrate IT networks to steal data, organizations can get better at detecting threats by establishing a baseline of normal behavior for all employees and assets in the organization - including common email communication patterns, website domains contacted, and operating activity leveraging behavioral modeling. The union of machine learning and security technology can provide quick and inexpensive answers to costly questions to automatically identify these very types of incidents."

Individuals can also take steps to protect their data. They should ensure they have an Identity Protection PIN (IP PIN) on file with the IRS to help stop fraudulent income tax returns.  Furthermore, they can visit the FTC and apply a credit freeze to each of the three credit bureaus."

Caroline Seymour, VP product marketing, Zerto

"Last year we saw the largest number of cyber-attacks on tax professionals yet. In an effort to combat this, the IRS and the Security Summit have partnered to encourage accountants and other tax preparers to update their IT systems and infrastructures to protect their customers' information.  But true protection is only possible with comprehensive strategies and tools that address all aspects of IT resilience. It's not just about having the latest security features to keep attacks out; you're only truly protected when you have disaster recovery and data protection in place as well to prevent attacks that do get in from gaining access to crucial data."

Lex Boost, CEO, Leaseweb USA:

"Software is essential for every accountant, accounting office and financial institution. At no time is that software more tested than during tax season. Each year demand for electronically filling taxes grows and software capabilities are forced to evolve in order to keep up. Yet, as they do, it's essential the software remain 100% accessible as millions of Americans log on to file their taxes. Companies not only need to build the right software; they also must have a hosting provider with the experience and knowledge to meet the unique challenges posed during this time of year. No matter how good the software application is, if customers can't quickly and reliably access it at a time of peak usage, they will look elsewhere. With demand growing year to year for e-filling services, tax software providers also need the flexibility to quickly scale infrastructure to meet the inundation of customers, once a year. If you can't work fast, efficient and 24/7 during tax season, you won't be around for the next tax season."

Published Thursday, April 04, 2019 7:25 AM by David Marshall
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