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Tax headaches for small businesses include threat of cyberattacks

Small businesses face a host of potential challenges with tax compliance.

Payroll taxes, for example, require considerable attention to administer. That is why so many small businesses use third-party payroll companies to handle their payroll services. As we noted in our February 19 post, this can leave businesses in the lurch when a third-party company experiences financial problems or commits theft.

There are also of course a host of issues for small businesses regarding the tax aspects of the Affordable Care Act.

In this post, let’s look at another tax-related headache for small businesses: the threat posed by tax-related scams launched by cybercriminals.

Large businesses certainly have their own cybersecurity concerns as well. Just ask Target Corp. about its widely-reported data breach.

Overall, however, small businesses tend to be more at risk from scams launched by cybercriminals than larger businesses. This is because large companies generally have better protections in place against tax-related cyberattacks.

What are some of these cyberattack tactics?

One common line of attack is tax-related phishing scams. Cybercrooks posing as revenue agents try to use tainted e-mails to capture personal information or financial data from taxpayers. As we noted in our February 7 post, such scams and other types of fraud pose a major problem to both individuals and businesses.

But there other types of cyberattacks that are equally or even more vicious.

One of these is so-called “financial Trojans.” Yes, that’s right – Trojan as in Trojan horse. These attacks try to get targets to open an attachment because it supposedly came from Turbotax or some other popular tax-prep tool. Opening the attachment, however, can enable the installation of malware that lets cyberthieves steal important financial information.

There is also an extremely vicious method of attack called ransomware. With this type of attack, an e-mail that looks on the surface to be about tax information may actually contain a virus that allows thieves to take over someone’s computer. Once the thieves gain control of the computer, the small business becomes vulnerable to demands for ransom.

Source: CNN Money, "Tax season unleashes cyberscams," Parija Kavilanz, March 18, 2014

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