Jurisdiction
An increasing number of legal challenges for startups that utilize the Internet, are in the area of informational privacy protection. To date, there is no single piece of legislation or bill of rights which provides comprehensive regulation of the collection, storage, transmission or use of personal information.[1] Personal information is defined as data that is used to identify, contact, or locate a person, including name, address, telephone number, or email address. [2] Currently, protection of consumer privacy over the Internet is a piecemeal collection of various state and federal statutes. However, as users and regulators become increasingly savvy about the methods of data collection and its uses, that legislation slowly creates a framework that becomes of increasing importance to small businesses and startups that utilize the internet. The Federal Trade Commission has been particularly active in recent years in assessing the threats posed by online data collection and issuing several reports on the subject.[3] In particular, Congress has already taken action with respect to data collection obtained from minors.[4] Failure to take privacy issues into consideration may subject companies to federal or state action, in addition to consumer class action suits. Because enforcement actions are on the rise, startup companies must exercise particular vigilance in this area to protect themselves and the privacy of their users.
As in many other areas of law, the State of California has been on the front line of bringing about aggressive changes in the laws concerning protection for online consumers. The economic power and size of California, in addition to being the primary locus for much of the startup activity in the technological world, means that the cost of doing business for many companies includes compliance with California privacy law. Many elements of privacy protection, which are merely recommended by the Federal Trade Commission and other regulatory bodies, are required by statute in California. A prime example is the Online Privacy Protection Act. Technology law scholars, Richard Raysman and Peter Brown, note that the law “requires that any collection of personally identifiable information from California residents through a Web site or online service for commercial purposes be done pursuant to a conspicuously posted privacy policy.” [1] Federal law creates no such requirement for disclosure.
Because of public vehemence toward SPAM communication, small businesses and startup must exercise extreme caution when engaging in electronic marketing or any other communication that is not specifically solicited by the user. Failure to do so, in addition to regulatory and civil penalties, can expose a new business to significant damage to their goodwill, which depending on the nature of the business could be fatal to an early-stage company. However, early stage companies can avoid violation of the CAN-SPAM act by engaging in good business practices related to electronic communications. Messages that are advertisements or that otherwise solicit business should identify themselves as an advertisement. The Federal Trade Commission has not issued guidelines on how to achieve disclosure, given the variance in messages and their layout it might be difficult to do so, but communicating in a manner that is clear to the recipient will generally comply with the requirements of the statute.[13] In addition, the message must provide to the recipient the identity of its sender, including critical contact information, such as physical address or registered post-office box and some other means of communication with the sender, such as telephone number or reply email address.
Another key issue for startups when it comes to data security is ensuring compliance the Federal Trade Commission “disposal rule.” Originally implemented as a means as for combating identify theft of information stored on large corporate servers, the Disposal Rule is part of the Fair and Accurate Credit Transactions Act of 2003. In a nutshell, companies are required to implement certain safeguards when destroying electronic files so that these files cannot be read or reconstructed by unauthorized users. As it would pertain to startups, any customers lists, credit reporting data, medical information, and any sensitive financial information or confidential customer communications (relating to online communications companies) should be appropriately safeguarded and disposed of in a prudent fashion.[21]
These types of IRS transcripts are a record of all of the wage and income data provided to the IRS by 3rd party providers including your employer, banks, financial institutions, brokerage houses, other government agencies, corporations, casinos, and a few others. All W2s, W2-Gs, 1099s, 1098s, 5498s, K1s, and other records of income on file for your social security number will be listed. Wage and income transcripts are most beneficial when preparing past returns because they are a quick and easy listing of income that you may have earned for that tax year. However, wage and income IRS transcripts should be checked for potential errors and compared with the information that you have in your records. 3rd parties can and frequently do make mistakes. Also, equally important, is to check your wage and income transcript for instances of identity theft. Wage and income transcripts are also an excellent provide insight into what information the IRS has on file for you. Although hopefully you will be able to prevent adverse collection activity before it occurs after reading this book, wage and income transcripts can give some idea of what they may come after (and how quickly they will be able to find it) if collection activity does occur.
To assist taxpayers and practitioners, the IRS will provide taxpayers with transcripts of the information that the IRS has on file. There are three main types of IRS transcripts that taxpayers should be aware of before checking their account. These are IRS account transcripts, IRS return transcripts, and IRS wage and income transcripts.
I have prepared a list of tips to help you chose a tax preparer and to make sure they are doing the job that you hired them for.
In the tax world, to quote Benjamin Franklin, an ounce of prevention is worth a pound of cure. Almost all taxpayers can engage in some level of tax planning to their benefit prior to a return being filed. As a practitioner, I like to perform a mid-year check with my clients to review their current tax situations and to make sure they are on track with where we have identified they need to be. Although particularly helpful with self-employed individuals and those with small businesses, to ensure that they are making proper tax deposits, it can also be helpful for W2 employees who want to adjust their withholdings during the course of the year. In addition, I would recommend checking in with a tax professional to understand the tax consequences of any major life events. Getting married, having a child, changing jobs, getting a raise, buying a house, moving, caring for another individual, and a variety of other changes can all impact your future tax situation. It is always better to be able to be aware that you may have a balance due at the earliest possible juncture in order to try and minimize your liability.
Once an IRS tax liability has become final, the taxpayer has a few options for dealing with an IRS liability. Each of these options carries its own advantages and disadvantages and taxpayers should take the opportunity to learn fully about the different ways of settling their balances before proceeding with one option or another. As a helpful guide to assessing what exactly the consequences of each action are, I have put together a short list of some of the advantages and disadvantages of each option.