As tax season looms, Americans prepare to file their annual returns to the federal government, which can be stressful for many individuals. What most people might not know is that this time of year can also affect small and medium size businesses (SMBs) with various cybersecurity risks such as phishing, data breaches, and identity theft. Research shows that in 2018, the IRS noted a 60% increase in phishing emails that seek to steal money or tax data. It is vital to be prepared during tax season as cybercriminals continue to target SMB owners and trick them into disclosing sensitive information about their company and clients.
Here are five tips for keeping your data safe in the run-up to April 15.
#1. Understand the Cybersecurity Risks Associated with Tax Season
Surprisingly, few SMB owners truly understand the ramifications of cyberattacks at this time of year. Cybercrime is particularly high during tax season because the stakes are so high. Many IRS forms contain sensitive information like names, addresses, bank details, and Social Security numbers, and cybercriminals can use all of this data to commit identity theft.
There are several ways cybercriminals carry out fraud during tax season:
- Sending phishing emails, often purporting to be from the Internal Revenue Service (IRS), in order to gain access to sensitive financial information.
- Pretending to be someone else and tricking you into downloading malware onto computer systems to access information on W-2 forms and other documents.
- Accessing sensitive information and applying for credit and bank services in your company’s name.
If hackers get access to your company’s financial information, you won’t just suffer monetary losses. There could be a breakdown in trust between you and your employees. Additionally, you could face strict penalties for data protection legislation non-compliance. If you work in the healthcare sector, for example, you might have to pay thousands of dollars for violating HIPAA data compliance rules.
The problem is so severe that the IRS has introduced Annual National Tax Security Awareness Week, which takes place every year in early December, around the start of tax season. The purpose of this initiative is to “urge individual taxpayers, businesses and tax professionals to enhance their online security as identity thieves step up their efforts to steal personal and financial data ahead of the 2020 tax filing season.”
It’s essential that SMBs owners be aware of the dangers during tax season and the consequences a data breach, phishing scam, or any other type of cybersecurity event can have on a business and its employees. Understanding these risks is the first step in keeping your data safe.
#2. Be Prepared
Many SMBs only improve their data security strategies after a breach, often when it’s far too late. It’s important to understand that cyberattacks don’t just happen to large companies. Verizon reports that fifty-eight percent of all attacks target small businesses. Though large corporations like like Yahoo! and Target, hit the headlines when they experience a data breach, it doesn’t mean small businesses are safe.
A cybersecurity threat can happen to any business at any time, regardless of its size. Eighty-eight percent of small businesses feel their business is vulnerable to a cyberattack, but the majority of these have limited time to address cybersecurity or just don’t know how to vet with professional IT managed services.
Check out these eye-opening cybersecurity stats that every small business should know.
It is vital that companies, small and large, be prepared in the event of a cyberattack. Planning for a potential data breach isn’t pessimistic — it’s just being realistic. In fact, you could reduce your chances of being affected by a data breach just by improving your in-house security standards.
- Ensure your anti-virus software, firewalls, and other security programs are all up-to-date prior to tax season. This can prevent hackers from accessing sensitive information.
- Review any Bring-Your-Own-Device (BYOD) and clean desk policies.
- Conduct a security audit in your organization, where you identify any potential threats.
- Update your in-house security practices for all staff.
- Create a disaster recovery plan in case the worst does happen (more on this later).
One of the best ways to be prepared is to work with an expert IT company who can optimize your security protocols, so you can keep your valuable information safe during tax season. A reputable company like TechWerxe provides turn-key managed IT services that allow you to focus on your core business offerings. As a result, you can:
- Keep your data safe.
- Reduce the threat of data breaches and other cybersecurity events.
- Avoid fines for data security non-compliance.
TechWerxe takes the stress out of tax season with a wide range of security services that provide you with peace of mind, including IT and software support, as well as anti-virus, spyware, and malware protection that you can count on.
Enlisting the services of a company like TechWerxe will provide you with a long-term return on your investment. The average cost per stolen or lost record in a small business amounts to $148. Most small businesses have hundreds, or even thousands of records; a data breach could possibly cost hundreds of thousands of dollars.
#3. Educate Your Team
Tax season is the busiest time of the year for many SMBs. You might need to prepare invoices, collect funds, and work with accountants. However, you should find time to educate your entire team about the repercussions of a cyberattack and the steps they should take to prevent a data breach from happening and what to do if it does happen. Be sure to provide some examples of things they should look out for:
- Suspicious Emails:
- Double check links/URLS for any suspicion before following it, these links can download malware onto devices. Scammers can then lock computer systems and hold your company for ransom. Alternatively, fraudsters can search for tax information in files and folders.
- Never give out personal or financial details in an email. Scammers can use this data to build a profile of your business and commit identity fraud in your name.
- Check the sender’s email address. Sometimes, it might seem that an important client or customer has sent you an email, but things aren’t always what they seem.
- Check the spelling and grammar in emails from companies, including invoices. Often, phishing emails will contain spelling errors.
- Fake IRS Emails or Phone Calls
- Don’t trust a phone call or email from someone claiming to be calling from the IRS. This is a go-to for scammers, asking for tax related issues or personal information. The IRS has made it clear that they will never contact taxpayers over the phone or via email to request financial information unless they have contacted the agency first.
#4. Keep Tax Data Safe
Think about all the tax data in your organization — pay stubs, invoices, W2 forms, you name it. All this information is extremely lucrative to cybercriminals. Keep your data safe:
- Set up access control on your computer systems, so only the right people can access valuable financial information and not your entire team.
- Create an effective clean desk policy, where employees clean their desks at the end of the day and put documents in a safe place. This prevents the exposure of private tax and financial information on desks after working hours.
- Create an effective BYOD policy, where employees take the relevant safety precautions when accessing financial information about your company on their smartphones, laptops, or tablets.
- File tax returns as early as you can during tax season.
#5. Implement a Disaster Recovery Plan
Be prepared if disaster strikes with a proper disaster recovery plan. You might not want to think of the worst-case scenario, but it’s important to be prepared for those “what if” moments. If you experience a data breach during tax season the following could happen:
- Cybercriminals might steal the money you need to send to the IRS. If you can’t pay the IRS, you might face penalties and interest or even risk prosecution.
- Cybercriminals can hijack your computer systems and demand ransom or expose your private information on the internet.
- You could lose the trust of valued customers if you experience a data breach, and these customers might decide to take their business elsewhere.
Your disaster recovery plan might take many different forms, but it should accomplish the following goals:
- It prioritizes the most-likely risks that could impact your business, whether that’s IRS scams, phishing attacks, or insider threats.
- It backs up data to a secure cloud environment so you can access it again in the event of an emergency and prevent disruption to your business.
- It contains a step-by-step guide on what to do in the event of a data breach or other catastrophic cybersecurity event.
- It includes full details of all the software your organization uses and alternative programs you can use in an emergency.
A disaster recovery plan can be difficult to implement, so it’s a good idea to hire an experienced managed service provider who can do the hard work for you.
Cybersecurity should be a year-round concern for your business. However, extra precautions should be taken during tax season, when cybercriminals are hungry for personal and financial information. Want to optimize your security at this time of the year?
- Know the ramifications of cybersecurity.
- Be prepared.
- Educate your team.
- Keep tax data safe.
- Implement a disaster recovery plan in your organization.
Incorporating cybersecurity into your organization can take up a lot of time and resources. Outsourcing these tasks to a reputable managed service provider makes financial sense. Looking for an IT managed service provider in the New York and New Jersey areas? Click here to find out more about TechWerxe.