IRS, States, Industry Continue Progress to Protect Taxpayers from Identity Theft

Issue Number:    IR-2015-117

Inside This Issue

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IRS, States, Industry Continue Progress to Protect Taxpayers from Identity Theft

WASHINGTON —The Internal Revenue Service, state tax administrators and leaders of the tax industry announced today continued progress to expand and strengthen protections against identity theft refund fraud for the 2016 tax season.
The public-private sector partnership announced success in identifying and testing more than 20 new data elements on tax return submissions that will be shared with the IRS and the states to help detect and prevent identity-theft related filings. In addition, the software industry is putting in place enhanced identity requirements and validation procedures for their customers to protect accounts from identity thieves.
“This unprecedented partnership continues to put strong new safeguards in place for the 2016 tax season,” IRS Commissioner John Koskinen said. “We are breaking new ground in the battle against identity theft. Taxpayers will have more protection than ever when they file their tax returns.”   Known as the Security Summit, the unprecedented collaborative effort began in March and culminated in the development of several recommendations in June between the IRS, leaders of tax preparation and software firms, payroll and tax financial product processors and state tax administrators.  Security Summit participants also identified additional topics for collaboration in the months ahead, and have continued to work together as a group to leverage their collective resources and efforts to protect taxpayers.
Koskinen and other leaders met in Washington, D.C. Tuesday to update the effort. To date, 34 state departments of revenue and 20 tax industry members have signed memorandums of understanding regarding roles, responsibilities and information sharing, with more expected to sign later.
As part of the Security Summit process, members from the IRS, states and industry are co-chairing and serving on several teams. The teams have focused on a number of areas including improved validation of the authenticity of taxpayers and information included on tax return submissions, increased information sharing to improve refund fraud detection and expand prevention, as well as more sophisticated threat assessment and strategy development to prevent risks and threats.
The industry and government groups identified numerous new data elements that can be shared at the time of filing with the IRS and states to help authenticate a taxpayer and detect identity theft refund fraud. There are more than 20 new data components that will help detect possible identity theft. The data will be submitted with the tax return transmission for the 2016 filing season, a step that will help detect and prevent refund fraud on both the federal and state level.
Another component will enhance identity validation for taxpayers using tax software. These stronger steps will protect taxpayer accounts by creating stronger verification of customers. This effort will include creation of security questions and device identity recognition at the time of log-on – both steps being used in the financial sector.
“We are taking new steps upfront to protect taxpayers at the time they file and beyond,” Koskinen said. “Thanks to the cooperative efforts taking place between the industry, the states and the IRS, we will have new tools in place this January to protect taxpayers during the 2016 filing season.”

In addition to the states and companies from the private sector, the summit team includes several groups including the Federation of Tax Administrators (FTA) representing the states, the Council for Electronic Revenue Communication Advancement (CERCA) and the American Coalition for Taxpayer Rights (ACTR). A wide variety of groups have also joined in supporting the summit effort, including Free File Inc., the National Association of Computerized Tax Processors, the National Branded Prepaid Card Association and the Financial Services Roundtable.

Three Ways to Start Small, Think Big

Article written by Eric Bank

Launching your own small company is both exciting and worrisome. Any entrepreneur devotes substantial time to thinking and fretting about a new undertaking. As the day arrives when it's time to "go live," you will no doubt experience some hesitation. That's to be expected, but you can make it through the launch anxieties by thinking big --growing your idea from a tiny enterprise to a massive industry legend. You might not succeed, but the secret is to behave as if you will. This means giving attention to the large picture while seeing to the numerous activities necessary to propel the business forward. Here are three easy-to-follow tips for starting small and thinking big.

1. Adopt the Right Attitude
The energy you need for business success is more like that of a marathon runner than a sprinter. The crushing pressure to succeed spawns the desire to do everything all at once. Unfortunately, this leads to exhaustion or worse. Do not turn into a burnout, a working robot who sacrifices friends, family and happiness. Rather, focus on those activities needed to boost the long-term triumph of your business. Then, set a manageable pace that you can maintain for several years. To avoid burnout, set boundaries between your job and your private life -- if you work 9 hours a day at work, devote the other 15 are to non-work actions. Don't work weekends, or at least not Sundays. Make time for relaxation and creativity, taking vacations at least a couple of times per year.

2. Experiment
Experimentation calls for some bravery, but it's necessary. Ask yourself these underlying questions:

• How will you measure success?
• What are the major challenges you face?
• How will you change the industry you're in?

These questions are harder to answer than figuring out whether to order the orange widgets or the green ones. You need both big and small thinking, and you'll quickly find out that no one answer is "correct" -- you can succeed several different ways. Instead of insisting on the "ideal" strategy, attempt a few different ones and figure out which one gives you the best outcomes. You'll get a good feel for your market. You will also find out how to avoid perfectionism, to efficiently market your products and services, and to adopt marketing techniques such as pilot projects for services or product focus groups. Ask the biggest questions you must confront and then develop experiments that will help you find the answers.

3. Learn From Others
If you wish to succeed, identify businesses and entrepreneurs who can inspire you. These are the companies that will teach you about becoming big. Bear in mind, industry titans frequently have modest beginnings, maybe similar to yours. Read up on their formative years and make note of their decisions - it will remove some of the uncertainty from your future.

Concentrate on your long-term direction, adopt useful habits and take manageable steps that create the momentum to succeed. You just might be surprised at the outcome!

From the Philadelphia Business Journal

:http://www.bizjournals.com/philadelphia/blog/guest-comment/2015/10/nearly-75-of-merchants-at-risk-without-emv-chip.html

About 75% of merchants at risk without new credit card chip tech

Oct 13, 2015, 12:27pm EDT UPDATED: Oct 13, 2015, 2:28pm EDT
Michael Collester, Guest Columnist

Daniel Acker | Bloomberg

As of Oct. 1, any business processing a credit card in person without an EMV (Europay, MasterCard, Visa) chip card payment process system is on the hook for fraudulent card use. Before October 1, the card issuer held primary liability.

This seemingly minor detail isn’t minor at all. According to an article published in PaymentsSource in 2015, fraudulent liabilities in the United States will exceed about $10 billion this year. Fraud is rampant. The cost of not transitioning to EMV technology could be financially devastating to a business owner.

Unfortunately, many businesses owners are oblivious to the new risk. According to a survey conducted by The Strawhecker Group, only 27 percent of merchants were EMV ready by the October deadline. Fewer than half will be ready by June 2016. Some are simply unaware. Others don’t fully realize the potential impact of fraudulent charges compared to the relative ease of adapting to the new technology.

EMV chip card technology is a global payment system designed to decrease debit and credit card vulnerability during fraudulent in-person transactions. A microprocessor chip about the size of a fingernail is embedded into each EMV card. The chip improves card security, making data more difficult to steal and reuse. EMV chip card technology is common elsewhere in the world and is finally becoming standard in the United States.

The EMV migration is not a mandated upgrade. However, it is in merchants’ best interest to switch to EMV-capable equipment and software as soon as possible. The top hurdles preventing businesses from becoming EMV compliant include processor readiness, gateway readiness and the need to replace point of sale (POS) terminals.

Ultimately, liability exists with the least compliant EMV party. If a merchant does not have the ability to process EMV chip card technology then liability falls on it. If the merchant processes EMV, but the card used is not an EMV card, or is a fraudulent EMV card, then the liability falls on the card issuer.

Switching to EMV chip card technology should be a priority. Although many companies are delaying or prolonging the process, the minimal cost savings do not offset the new and significant liability risk. Many business owners fear that the transition process is cumbersome and cost prohibitive. Some simply don’t know where to start.

Thankfully, the path to becoming an EMV-compliant business is neither complicated nor difficult. Business owners still in need of EMV technology should contact their payment service provider. From there, their provider will handle most of the transition, working with the business to install new terminals and software. A good payment service provider can accomplish this process in 1-3 days. Most companies will either be charged one up-front price for the new technology (ranging from $200 to $300) or will establish a monthly fee to spread the cost over time.

If your payment service provider does not handle this transition or is unable to do it in a timely manner, do not wait. Contact another provider immediately. The additional party can work on a provisional basis to help your businesses become EMV compliant and avoid liability.

Technology is always evolving. EMV chip card technology is now the most up-to-date and secure credit/debit card processing technology in the market, but it won’t be the last. Working with a flexible payment service provider is imperative to tracking these changes and evolving your business with the technology to stay compliant and avoid fraudulent charges.

Michael Collester is president and CEO of JetPay Strategic Partners. He can be reached at mcollester@acimerchant.com.

http://www.bizjournals.com/philadelphia/blog/guest-comment/2015/10/nearly-75-of-merchants-at-risk-without-emv-chip.html

Arizona Public Service Small Business Scam Alert!

APS Small Business Scam Alert

FOR IMMEDIATE RELEASE
September 29, 2015


CONSUMER ALERT:
NEW SCAM HAS SMALL BUSINESS CUSTOMERS CALLING FAKE CALL CENTER
APS urges all customers to be aware of possible fraud

PHOENIX – Several small businesses in the Phoenix metro area have been called by individuals falsely representing themselves as APS employees. The potential victims are instructed to call a toll-free number to pay their electric bill under threat of having service disconnected within the hour.

The false number goes to a phone system that acts and sounds like the actual APS call center. Customers are asked to select a number for the service they require, including reporting an outage. After selecting the option to pay your bill, an individual picks up the phone and says, “This is Wendy (or another name), thanks for calling APS. How can I help you?”

If a potential fraud victim begins to question the fake APS employee, the response is rude, followed by a disconnection of the call.

APS security, local law enforcement and the FBI are currently working together to apprehend those responsible.

To help customers from becoming a victim of consumer scams, including the most recent attempts, APS provides the following suggestions:

·         The only valid numbers to the customer call center are listed on customer bills.

·         If there is ever a question about the validity of an email, website or person claiming to be an APS representative, call the APS Customer Care Center immediately at 602-371-7171 in order to verify this information.

·         Recognize the signs of a phishing email: mismatched fonts, missing hyperlinks, improper grammar and misspellings.

·         Never share credit card information with an unverified source. Customers who pay by credit card at aps.com will be directed to the KUBRA EZ-Pay website which asks the customer to enter a “captcha” validation code. Any other credit card payment site is fraudulent and should not be used (A “captcha” typically uses a set of letters and numbers that the user is required to manually retype and submit).

APS, Arizona’s largest and longest-serving electricity utility, serves nearly 1.2 million customers in 11 of the state’s 15 counties. With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).

Media Contact:
Steven Gotfried,
(602) 250-3040
Website:
aps.com/newsroom

NEW FEDERAL RULES COULD CAUSE THE LOSS OF JOBS IN ARIZONA

http://www.asba.com/ MESSAGE FROM THE ASBA CEO

Rick Murray, Chief Executive Officer Arizona Small Business Association 4600 E. Washington St., #340, Phoenix 602.306.4000 - rmurray@asba.com

NEW FEDERAL RULES COULD CAUSE THE LOSS OF JOBS IN ARIZONA

Once again the federal government is trying to tell you how much to pay your employees.  The Department of Labor (DOL) has proposed rules on overtime pay that, if enacted, will have a chilling effect on job growth and economic development in Arizona and across the country. In additional to the massive threshold increase from the current $23,660 to $50,400, below which employees must be paid overtime, the DOL gave only 60 days for stakeholders to study the far-reaching impacts the rule will have.  ASBA has been lobbying our delegation in Washington to help extend the comment process. But with the summer recess Congress takes, coupled with a mere 60-day comment period and a dismissive refusal to extend the comment period by the DOL, indicates a clear intent to stymie small-business input into the process. Among the key issues raised: the cost of compliance for small businesses will be much greater than the DOL estimate; changes to the duties test are likely to miss the fact that there is no bright line between "exempt" and "non-exempt" in the typical small business workplace; the creation of new hourly reporting and tracking requirements are likely to be a disproportionate burden on smaller firms; the rule could force struggling small firms to reduce employee hours; and employee morale will take a significant hit where employees must be  "downgraded" from exempt managers to non-exempt workers. Small businesses are often not equipped to monitor the activities of their employees in order to regulate their time. Companies with fewer than 20 employees rarely have a dedicated HR department, so the creation of new hourly reporting and tracking requirements are likely to be a much greater burden on these companies that do not currently face them. The result will be confusion and excess cost for individual business owners. Tracking the offsite use of company cell phones and computers will be especially difficult for these smallest companies, who are likely to limit the issuance of such devices. For these reasons, we have been urging our representatives in Washington to ask the Department of Labor to reconsider significant portions of the proposed rule, and recognize the significant new burdens and complications that such a regulation would create for small employers and their employees. http://www.asba.com/