1. Important Update: President Signs Red Flag Clarification Act into Law

    Professional service providers such as attorneys, accountants, and doctors no longer fall within the definition of a creditor under the Red Flag Rule. The Federal Trade Commission’s (FTC) so-called “Red Flag Rule,” which requires all businesses that are potential identity-theft targets to develop plans to spot red flags and prevent theft, received much criticism for being too broad. But now there’s some relief:  S. 3987, the Red Flag Clarification Act, which President Obama signed into law in December 2010. To recap, under the Red Flag Rule, the FTC had been interpreting “creditor” broadly by including organizations that defer payment for goods or services and bill clients later. This led to widespread concern that the Red Flag Rule would be applicable to entities not typically thought of as creditors, including law firms and health care providers. The Red Flag Clarification Act exempts such entities by revising the definition of creditor to exclude creditors “that advance funds on behalf of a person for expenses incidental to a service provided by the creditor to that person.” Essentially, the Red Flag Clarification Act limits the scope of the Red Flag Rule to creditors that regularly and in the ordinary course of business obtain or use consumer reports in connection with a credit transaction; furnish information to consumer reporting agencies in connection with a credit transaction; or advance funds to a person based on the person’s obligation to repay the funds. The legislation does include a provision that would allow other types of creditors to be subject to the Red Flag Rule if the agency with authority over the creditor (such as federal banking agencies) determines that the creditor has accounts that are subject to a reasonably foreseeable risk of identity theft.
  2. Need A Break? Tax Law Extends Single-year Equipment Deduction Through 2011

    When you acquire equipment for your businesses, you can deduct the entire cost in a single year, thanks to a tax break that’s been extended through the end of 2011. In the past, business equipment such as computers and machinery had to be deducted over a number of years. Then a new tax code provision was enacted to help spur economic growth. That provision, called Section 179, allowed taxpayers to deduct the cost of equipment as an expense rather than requiring the cost of the property to be capitalized and depreciated. In other words, single-year deductions were permitted — much to the benefit of small and medium businesses. The Section 179 deduction started out at $25,000, increased to $125,000 then $250,000, and finally ended up at $500,000. And many assets qualify for the tax break, including computers, software, office machines and furniture, manufacturing equipment, and vehicles that weigh more than 6,000 pounds. How does it work? Lets’ say you have a $600,000 profit and don’t want to pay taxes on that entire amount. At the same time, you need new computer equipment. You can buy that new equipment for $500,000 and only owe taxes on $100,000 of your profits. Section 179 was set to expire at the end of 2010, but it’s now been extended. The Tax Relief Act of 2010, signed on 12/17/10, allows business owners to take Section 179 deductions through the 2011 tax year. That means 2011 is a great year to consider purchasing equipment, because the immediate writeoff helps businesses such as yours keep more cash free for other purposes. “There is a big advantage to having that cash flow right away,” says Abe Schneier, a senior manager at the American Institute of Certified Public Accountants. “Even in the best of times, it is hard for many small businesses to borrow money for any sizeable investment.” Related articles: Equipment eligible for the Section 179 deduction
  3. Are You in Compliance with Identity Theft Regulations?

    The federal government’s Red Flag Rule requires all businesses that are potential identity theft targets develop plans to spot red flags and prevent theft. How can you comply? Regulations designed to minimize identity theft went into effect in June of 2010. Are you complying with them? The federal government’s so-called “Red Flag Rule” requires all businesses that are potential identity-theft targets develop plans to spot red flags and prevent theft. Red flags include suspicious photo IDs, unverifiable addresses and Social Security numbers, and questionable account activity, to name just a few. While many companies think the Red Flag Rule only applies to financial institutions, it actually applies to all creditors — with creditors being defined as “businesses or organizations that regularly provide goods and services first and allow customers to pay later,” according to a Frequently Asked Questions guide prepared by the Federal Trade Commission, which will enforce the Red Flag Rule. In other words, if you invoice customers for your goods or services, you’re a creditor — and the Red Flag Rule applies to you. How can you comply?  You’ll need to have a written policy that specifically addresses how you will prevent and handle identity theft. Other recommendations include data encryption, annual updates of your written policy, and staff training. While this may seem onerous, you don’t want to ignore the legislation. Fines are $3,500 per violation — and the threat of a lawsuit from customers whose identity has been stolen. Related articles Do You Comply with the FTC’s Red Flag Fule?
  4. How You Can Comply with the Red Flag Rule

    To comply with the federal government’s Red Flag Rule, you’ll need to have a written policy that specifically addresses how you will prevent and handle identity theft — and more. Regulations designed to minimize identity theft went into effect in June of 2010. Are you complying with them? The federal government’s so-called “Red Flag Rule” requires all businesses that are potential identity-theft targets develop plans to spot red flags and prevent theft. Red flags include suspicious photo IDs, unverifiable addresses and Social Security numbers, and questionable account activity, to name just a few. While many companies think the Red Flag Rule only applies to financial institutions, it actually applies to all creditors — with creditors being defined as “businesses or organizations that regularly provide goods and services first and allow customers to pay later,” according to a Frequently Asked Questions guide prepared by the Federal Trade Commission, which will enforce the Red Flag Rule. In other words, if you invoice customers for your goods or services, you’re a creditor — and the Red Flag Rule applies to you. How can you comply?  You’ll need to have a written policy that specifically addresses how you will prevent and handle identity theft. Other recommendations include data encryption, annual updates of your written policy, and staff training. While this may seem onerous, you don’t want to ignore the legislation. Fines are $3,500 per violation — and the threat of a lawsuit from customers whose identity has been stolen. Related articles Do You Comply with the FTC’s Red Flag Fule?
  5. National Cyber Security Awareness Campaign Challenge a Huge Success

    The United States Homeland Security Department’s National Cyber Security Awareness Campaign Challenge was a huge success, with more than 80 security proposals submitted with the goal of increasing awareness regarding threats to cyber security. Out of the over 80 submitted entries, seven were chosen to receive awards at a ceremony at the White House recently. One noteworthy proposal was a 5k run dubbed “Trot Against Bots”, which aims to intentionally cause traffic jams to demonstrate the effect of security problems causing disruptions in internet traffic, bagging the Best Creative Approach award. Cisco Systems, Inc., also got a nod for their “Cybersecurity is Everyone’s Responsibility” Publicity and Marketing plan, which highlights the importance of using cyberspace responsibly as an individual compared to the shared effort of making the internet a safe place for all. Another notable proposal was the “Think Before You Click” campaign from Deloitte & Touche, LLP, which won the Best Iconic and Overall Structure. As the name suggests, the campaign aims to curb the pervasive habit of clicking links before analyzing the possible content of the website to be accessed or the file to be downloaded. Other winners include: Best Local/Community Plan - Securing Our eCity San Diego and MyMaine Privacy; Best Individual Plan - “Cybersecurity Starts Here: Home, School and Main Street” by Melissa Short; and Best Educational Plan - Pennsylvania State University’s “CyberLink Games”. Homeland Security plans to utilize the winning concepts and integrate them into their National Cybersecurity Awareness Campaign. Source: http://www.dhs.gov/files/cyber-awareness-campaign.shtm


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