Ask the Expert

Ready to kiss those paper and pencil tax returns goodbye? Safely file your taxes online with advice from CyberScout Chief Privacy Officer Eduard Goodman.

Thursday, March 10, 2011

Q: I’m filing my taxes online this year for the first time. My friends say it’s easy and saves time, but it seems like it just opens a whole new can of worms. Is it safe? How can I make sure my information is protected?

A: There are lots of operations that do this now, like H&R Block and TurboTax. I would trust the big-name companies to safeguard my data more than I trust my own systems at home.

Many of the major tax-preparation organizations have been thinking about privacy “in the cloud”—meaning the process occurs over the Internet and your information lives on a server somewhere else, not on your own computer—for a long time. In the tax arena, I personally feel more comfortable dealing with a household name, because they are more likely to comply with best practices and have more stringent security policies. That said, every consumer has a responsibility to do appropriate due diligence to ensure that he/she is on the same page as the tax preparer when it comes to the security of information and the integrity of their processes. The IRS recently spelled out its mandated e-File Security, Privacy and Business Standards. Your provider should be following these to the letter and likely will be touting that they do.

As for your own best practices, whenever you work online, you should always be running anti-virus, anti-malware and anti-spyware programs and working on a secure connection—no coffee shop wireless networks. Always look for the small gold lock on the webpage. Remember that if you’re self-filing, it’s not software anymore, it’s Software as a Service, so it’s in the cloud. (If you’re emailing files back and forth with your accountant, make sure everything is encrypted/password protected. If you’re sending actual documents through the mail, make sure they’re sent with a delivery confirmation, available through the U.S. Postal Service or other delivery services like UPS or FedEx.)

You should be taking these steps not only to protect yourself but also because, if your information is compromised, you aren’t protected if you haven’t taken proper security steps on your end, since most of these tax preparer sites probably have disclaimers in their contracts to cover that situation.

Be sure to review the provider’s privacy policy. Check that the information you submit to them isn’t shared or resold to third parties. Read the fine print. Make sure they say they use industry-standard security. From a customer-protection standpoint, you want to know they acknowledge that this is sensitive information, and they’re making their best efforts to secure your data.

Eduard Goodman – An internationally trained attorney and privacy expert, Eduard is the chief privacy officer at CyberScout—the nation’s premier identity management, fraud solutions and consumer education service. He blends unique consumer and business perspectives to resolve issues around privacy, fraud and identity management.


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