11.28.23

A new federal law will require small business entities to submit their beneficial owners’ identification documents to a federal database in 2024. Aimed at combatting global financial crime, the Corporate Transparency Act (CTA) will affect an estimated 32.6 million of the country’s smallest business entities, such as those simply holding real estate or operating a casual interest business. Penalties for noncompliance are potentially steep, and some of the law’s provisions will make compliance challenging. For example, identifying beneficial owners requires careful consideration—the definition doesn’t include all owners, but includes some individuals who are not owners at all. Perhaps most strikingly, changes as mundane as a change of address of an owner residence must be reported within 30 days. No system currently exists in American business to support such a reporting timeline, and many professionals are campaigning for a delay the law’s implementation.

12.06.23

Tax season can be daunting for both employees and employers alike. As an employer, not only do you have to file your taxes, but you are also responsible for protecting your employee's personal information - including their W-2 forms.

During the 2022 tax filing season, the IRS flagged more than one million tax returns totaling $6.3 billion in refunds as potentially fraudulent. These alarming figures underscore the significance of safeguarding employees' information, particularly their W-2 form, which contains confidential details such as their Social Security numbers and income data, making them a prime target for cybercriminals.

The Risks of W-2 Information Falling into the Wrong Hands

There are several ways that criminals can obtain W-2 information and use it to their advantage. One common tactic is through phishing emails or phone calls, where scammers pose as IRS agents or company executives requesting W-2 information under the guise of "verifying" employee data. Another method is hacking into company databases or obtaining physical copies of W-2 forms.

The consequences of a successful attack on an employer's W-2 records can be devastating for both the employees and the company. Not only can it lead to identity theft and financial loss for individual employees, but it can also result in legal and financial repercussions for the company, such as fines and damage to its reputation.