1. CrowdStrike Outage Causes Global Disruptions

On July 19, 2024, CrowdStrike experienced a significant outage due to a faulty sensor configuration update for Windows systems. This outage caused widespread disruptions across various industries, including airlines, banks, and healthcare services, as systems crashed and displayed the "blue screen of death" error. The issue was quickly identified and resolved, but the impact was felt worldwide as companies scrambled to restore services.

Why It Matters

The outage underscores the critical need for robust IT contingency plans. Tax and accounting firms heavily rely on secure and operational systems to manage sensitive financial data and client interactions.

Actionable Steps

  1. Review and Update IT Contingency Plans: Ensure your firm has a comprehensive disaster recovery plan that includes steps for dealing with major software outages.
  2. Diversify Security Solutions: Consider using a mix of security solutions to avoid reliance on a single provider.
  3. Client Communication: Proactively inform clients about potential impacts on services and reassure them of measures taken to protect their data.

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2. IRS Crackdown Tops $1 Billion in Past-Due Taxes Collected

The IRS recently announced that it had reached $1 billion in past-due tax collections as a result of its targeted efforts toward wealthy taxpayers. They specifically targeted 1,600 individuals whose incomes were more than $1 million per year and who each owed the IRS more than $250,000 in recognized tax debt. This move is part of the broader initiative, funded by the Inflation Reduction Act, to close the tax gap and ensure compliance among high-income taxpayers. The agency plans to deploy advanced data analytics to identify discrepancies and potential areas of non-compliance.

Why It Matters

This development signals a more aggressive IRS stance that could affect not only high-net-worth clients and corporations but innocent taxpayers caught in the crossfire as well. Tax professionals must be vigilant and proactive in ensuring their clients' tax affairs are in order to avoid potential audits and penalties.

Actionable Steps

  1. Audit Preparation: Conduct thorough reviews of high-net-worth clients' tax filings to ensure accuracy and compliance.
  2. Client Education: Inform clients about the increased scrutiny and advise them on best practices to avoid triggering audits while maintaining compliance with all tax requirements.
  3. Stay Informed: Keep up with IRS announcements and updates to anticipate areas of focus in audits.

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3. IRS Provides Relief to Hurricane Beryl Victims in Texas

The IRS has announced tax relief for victims of Hurricane Beryl in Texas. Affected individuals and businesses now have until February 3, 2025, to file various tax returns and make tax payments. This relief is part of the federal response to support recovery efforts in disaster-stricken areas.

Why It Matters

This extension provides an opportunity to assist affected clients in navigating the complexities of tax relief and ensuring they take full advantage of the extended deadlines.

Actionable Steps

  1. Identify Affected Clients: Reach out to clients in the affected areas to inform them of the new deadlines.
  2. Filing Assistance: Offer services to help clients with the preparation and filing of delayed returns.
  3. Documentation: Ensure proper documentation of the disaster's impact on clients' financial situations to support claims for relief.

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4. Security Summit Warns Against Phishing Emails and Cloud-Based Attacks

The IRS, along with the Security Summit partners, issued a warning to tax professionals about the increasing threat of phishing emails and cloud-based attacks. These cyber threats are evolving and pose significant risks to sensitive taxpayer information.

Why It Matters

Tax professionals are prime targets for cybercriminals due to the sensitive data they handle. Staying vigilant and informed about these threats is essential to protect both client and business information.

Actionable Steps

  1. Enhance Cybersecurity Training: Regularly train staff to recognize and respond to phishing attempts and other cyber threats.
  2. Implement Multi-Factor Authentication: Strengthen security by using multi-factor authentication for accessing sensitive systems and data.
  3. Monitor and Update Security Measures: Continuously monitor cybersecurity measures and update them to address new and emerging threats.

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By: Maria Murphy, [Protection Plus] Marketing Content & Design Manager