Tax preparers are required by law to protect taxpayer information. Each tip we’ve shared with you over the 12 days of cybersecurity helps you stay safer in the online world.
NSA wants you to stay safe, not only because taxpayers are at risk, but because you’re a business owner. The consequences of a data breach or other cybercrime can be extensive and could collapse the business you’ve built.
Here is what the Insurance Information Institute says you could be liable for if your data is compromised:
If your computer systems are hacked or customer, employee or partner data is otherwise lost, stolen or compromised, the costs of response and remediation can be significant. Your business may be exposed to the following costs:
- Liability—You may be liable for costs incurred by customers and other third parties as a result of a cyberattack or another IT-related incident.
- System recovery—Repairing or replacing computer systems or lost data can result in significant costs. In addition, your company may not be able to remain operational while your system is down, resulting in further losses.
- Notification expenses—In several states, if your business stores customer data, you’re required to notify customers if a data breach has occurred or is even just suspected. This can be quite costly, especially if you have a large number of customers.
- Regulatory fines—Several federal and state regulations require businesses and organizations to protect consumer data. If a data breach results from your business’s failure to meet compliance requirements, you may incur substantial fines.
- Class action lawsuits—Large-scale data breaches have led to class action lawsuits filed on behalf of customers whose data and privacy was compromised.
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In dollars and cents, current data indicates that cyberattacks cost businesses an average of $200,000, and 60% of businesses close within six months of the data compromise. Read more statistics on CNBC
Should you find that you’ve been hacked, or that your systems have been compromised, follow your cybersecurity response plan. Be sure to visit the IRS “Identity Theft Central,” and direct your clients to do the same. The new page provides guidance on how to report identity theft. The sooner you react, the better.
Read the blog posts we’ve shared with you and take NSA’s advice. The changes you make help protect you, your business, and the clients you serve.