Posts Tagged ‘business owners’

Businesses Beware: Sloppy Data Security Could Cost You

Wednesday, August 26th, 2015

Defend Against A Data Breach - Ohio CPA FirmAs if you didn’t have enough keeping you up at night, the topic of data security continues to send collective shivers up the spines of business owners worldwide. Unfortunately, the Aug. 24, ruling by the United States Court of Appeals for the Third Circuit didn’t make matters any better (or less expensive) for businesses guilty of failing to protect their customers’ data. In fact, companies that utilize poor security practices that ultimately lead to a breach of consumer data are at risk of facing further disciplinary action and penalties.

Read Also: How Prepared Is Your Business For A Potential IT Disaster?

What does the FTC’s Courtroom Win Mean To Business Owners?

If you haven’t taken data security seriously in the past, it’s time to get real serious about it real quick.

Prior to the ruling, companies at the center of a data breach had to battle with lawsuits while working to rebuild their reputations. Now, in addition to litigation and negative headlines, your organization must also risk being fined by the Federal Trade Commission (FTC). Businesses can no longer operate with a subpar data security infrastructure. Those that do are at risk of losing everything.

The court upheld the FTC’s 2012 lawsuit against Wyndham Worldwide, a company known for operating hotels and time-shares. Records show that the FTC filed complaints against Wyndham for three data breaches occurring in 2008 and 2009, which resulted in more than $10.6 million in fraudulent charges. In its decision, the appeals court reaffirmed previous rulings that found Wyndham to be responsible for implementing better security practices, which would have helped prevent such breaches from occurring in the first place.

According to the FTC’s argument, software used at Wyndham-owned hotels stored credit card information as readable text, hotel computers lacked a system for monitoring malware, there was no requirement for user identification and or to make password difficult for hackers to guess, the company failed to use firewalls and, ultimately, failed to employ reasonable measures to detect and prevent unauthorized access to the computer network or to conduct security investigations.

“Today’s Third Circuit Court of Appeals decision reaffirms the FTC’s authority to hold companies accountable for failing to safeguard consumer data,” said FTC Chairwoman Edith Ramirez. “It is not only appropriate, but critical, that the FTC has the ability to take action on behalf of consumers when companies fail to take reasonable steps to secure sensitive consumer information.”

Next Steps For Businesses

With regard to the case between the FTC and Wyndham, the next chapter of the story is uncertain. While the win in the courtroom has helped put some wind in the FTC’s sails, the commission has yet to levy any penalties or assertions against the defendant. What is clear, however, is that a data security breach is a very real threat – one that is felt by nearly every business in the world. Furthermore, as technology continues to advance and hackers adapt, the security procedures businesses deploy must be top-notch to avoid further complications and costs associated with a sloppy security infrastructure.

Will you be ready when disaster strikes? Email Rea & Associates today to learn what you can do to protect your business from unforeseen threats.

By Brian Garland, CPA (Dublin office)

Want to learn more about how to protect your business from a data security crisis? Check out these articles:

Could Your Company Be Ransomware’s Next Victim?
Don’t Turn A Blind Eye To PCI Compliance
How Much Is Your Data Worth To Criminals?

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Like Losing Your Wallet – Only Worse

Friday, July 31st, 2015
Retirement Plan Returns- Ohio CPA Firm

Typically, owners of businesses and their spouses who fail to file their annual retirement plan returns are in full-scale crisis mode – and rightfully so, since missing this deadline results in a penalty that’s about the size of a small fortune.

For most of us, misplacing our keys, losing sight of our shoes and occasionally forgetting to pay the phone bill on time is not a catastrophic phenomenon. It happens; and most likely we will freak out for a minute, find what we were looking for and move on – only to repeat our dysfunctional routine countless times over the course of a lifetime. Forgetting to file your retirement plan returns on the other hand … well, let’s just say that’s typically not a stress-free event.

Read Also: Do You Know What Your Retirement Plan Is Costing You?

Typically, owners of businesses and their spouses who fail to file their annual retirement plan returns (Form 5500-EZ) are in full-scale crisis mode – and rightfully so, since missing this deadline results in a penalty that’s about the size of a small fortune. To be more precise, in years past, those who failed to meet their filing obligation could face a penalty totaling up to $15,000 per return. Fortunately, the IRS recently announced that instead of facing such an extreme late fee, eligible business owners can take advantage of a “low-cost penalty relief program.”

How Much Would You Pay?

The relief initiative, which started as a one-year pilot program in 2014, was tremendously successful, resulting in the collection of about 12,000 late returns. Because of this success, the program secured it’s permanency in May of this year. According to the news release, the program allows eligible business owners and their spouses to file late returns and only pay a $500 penalty for each return submitted with a maximum of $1,500 per plan. Because the IRS caps the maximum penalty at $1,500, applicants are encouraged to include multiple late returns in a single submission.

Eligibility

The IRS says that businesses with plans that cover the owner or the business’s partners (depending on how the business is set up) and their spouses are eligible to take advantage of this low-cost plan. Complete information about the program can be found by clicking here.

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Remember, your return must be filed annually no later than the end of the seventh month following the close of your plan year. So, for example, if your plan is governed by the calendar-year, as most are, your 2014 return was due today (Friday, July 31, 2015). Did you fail to file your small business’s annual retirement plan returns? Would you like to find out if you qualify for this program? Email a retirement plan expert at Rea & Associates and take control of your IRS debt now.

By Andrea McLane, QKA (Dublin office)

Want to read more about the importance of Retirement Plan Compliance?
Check out these articles:

401(k) Loans and Keeping Your Plan In Compliance
Retirement Roulette
The ‘Van Halen Philosophy’ of Retirement Plan Compliance

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