California Tax Education Council

Dear CTEC Board Of Directors: In the past few years tax clients have been hit hard by tax fraud and I think it is time that tax preparers and accountants in the State of California take an aggressive stand, supported by CTEC, on firm / preparer client data security. As you know the Federal Trade commission FTC has enacted rules that state that tax preparers fall under banking organizations because of the type of data collection we do in the course of preparing tax returns. They require that all tax preparers have a client data security policy in place, as well as the IRS. Our firm has become very aggressive in this matter. We even go as far as having our clients shutting off their cell phones, wifi, and blue tooth functions. We did this so that if a client, or a janitor, or anyone walking by an open tax return file wanted to take a picture of the return and send it off for fraudulent use. We had to do this because we do not want our clients blaming our firm for not protecting their data. All tax files are locked up in a secure room, the server for the tax and accounting software is locked up in a secure room, everything is backup daily to a secure site. We have put in a full client Data Security program in place on our web site to inform our clients what our policies are. Also, the State Attorney General has just come out with new rules on the collection of data and our informing our clients of how we collect data. http://vqagroup.com/policies--procedures.html Safeguarding Client Data I would ask that CTEC encourage each CTEC member to put in place this policy. The fines for not complying are steep if your client makes a claim that a tax preparer did not support their tax data. Regards, Michael Lodge Chairman, Risk Manager VisionQwest Accountancy Group www.vqagroup.com