As the year comes to an end many small businesses owners may already be thinking about the upcoming tax season. If you are among that population then here’s one more thing to think about: If you plan on filing your business taxes electronically or will be working with sensitive personal and financial information online in preparation for filing tax documents, then make sure you take enough precautions to ensure the safety of your data. There is an eager population of online hackers, fraudsters, and identity thieves hoping to turn your tax season into a lucrative fishing season.


Cyber-crime has been on the rise keeping pace with advances in technology that are pushing more and more transactions and sensitive personal and financial data online. According to the latest annual report by the Internet Crime Complaint Center, the number of recorded cyber-crime related complaints were the second highest in 2010 since the organization’s inception. This trend was also reported in the 2010 CSO Cyber Security Watch Survey, sponsored by Deloitte & Touche.

That said, here are a few tips to help you reduce the security risks involved in preparing and filing your tax return electronically:

  • Keep your security software and settings up-to-date. Make sure that you are using the latest version of any security software that you have installed. Most services have a setting that allows for automatic updates.


  • Stay wired. Where possible, avoid sending sensitive information via wireless Internet connections. If you must file wirelessly, make sure your wireless network is locked and data is encrypted, and use a WPA2 connection if possible.


  • Avoid transmitting sensitive information via email. Email as a general rule is not a secure way to send sensitive data so be very selective about the information you send. Be wary of any sites or services requesting data such as social security numbers, credit card numbers and information, bank account information, or passwords via email. Even if the message claims to be from the IRS, you should refrain from sending anything that could be exploited by identity thieves Where a sensitive document needs to be sent, then make sure it is password protected.


  • Watch out for scams. As tax time approaches, scammers get busy sending out official-looking email, supposedly from well-known tax preparers and tax-prep software vendors, such as H&R Block and TurboTax. They use these messages to lure people into providing sensitive personal and financial data. Again, as mentioned above, a legitimate site will never request such information over email.


  • Keep tabs on your credit reports and accounts. Shortly after filing your taxes make sure to take a look at your credit report for any suspicious activity that might show that your identity has been stolen. You should also make it a point to constantly review banking and credit accounts for any fraudulent transactions.

In short, if you want to avoid getting burned by cyber criminals this tax season then make sure you’re not taking their bait or inadvertently sending data into their awaiting nets

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