New Security Tools Bring an Increase in Costs and Fees

Identity theft has become a scourge upon the finances of many Americans. Using only fragments of personal information, hackers are able to create enough of an identity to access and destroy all sorts of personal finances. 

The most serious problem in the tax business is the fraudulent filing of tax returns using stolen Social Security numbers. Tax documents do not contain just a little information, they contain a lot. While many providers of tax documents have moved to restrict information, such as by only showing the last four digits of a Social Security number, many others have not. Forms W-2 and 1099-R are routinely sent out in the mail by employers and retirement systems with all nine numbers visible. Add to this the name and address of the recipient and identity theft via electronic filing of a false tax return becomes a very simple undertaking.

Our firm has always ensured the security of client information is of the highest priority. 

For example, for those of you who have come to see us in person for a face to face conference, you may have been aware that we access your personal data via an encrypted remote connection. There is no information about our firm's clients on our office computers or on our laptop computers, rendering client information secure from theft or burglary. This is why we have invested in a secure client portal, called Smartvault, which allows for the exchange of documents between or office and clients using bank-level encryption.

In addition to more security, we have also invested in legal education. Far from simplifying the tax code, the Tax Cuts and Jobs Act of 2017 (TCJA), passed in December of 2017, added new layers of complexity to federal tax law. Add into this mix that California did not change state law to conform to the new federal Act, and we are faced with two bodies of tax law. If you file a California tax return, whether you are a resident or non-resident, you will be filing two tax returns, each of which uses very different law. Tax law is already the most dynamic of all legal fields, but th e TCJA tax law changes have require many days of training and seminars to keep current and provide the level of competence we pride ourselves in.