In this week’s Q&A, we sit down with eFilcCabinet CEO Jesse Wood.
The Internal Revenue Service has loosened its digital signature policy in light of the ongoing COVID-19 crisis. This seems to have caused difficulties within the tax preparation industry. What should tax and accounting professionals consider when implementing this policy internally and externally?
With this big change by the IRS, on top of moving the filing deadline to July, accountants should have everything they need now to efficiently work from home during the crisis and get their clients’ tax work in order. However, there needs to be a measure of vigilance on their part. They need to have common cybersecurity policies in place to ensure that even though they’re working remotely and can stay connected with clients and colleagues, they’re doing it the right way. Accountants can now email certain documents directly to the IRS, but there needs to be a level of encryption involved. End-to-end encryption is necessary to keep a client’s personal information safe, and so using established, secure file-sharing services to transfer documents is a must. Just a little bit of knowledge about cybersecurity as well as some common-sense practices can go a long way.
Do you have a best practices checklist you could share?
Here are a few articles we’ve recently written on working remotely and how you should prepare.
- Working Through a Public Health Emergency
- eFileCabinet Works from Home too
- Prepare Business for Pandemic
How do products like eFileCabinet help tax and accounting professionals to ease the difficulties?
Security and convenience. You normally have to pick one or the other, but we pride ourselves on being able to provide both. We give uncompromising access to our customers’ documents, but still, maintain security and compliance tools they can customize to make their system as secure as they need. Plus we strive to provide continued support to each and every one of our customers, even though we’re all working from home. With secure, compliant eSignature built-in, so your clients don’t have to even worry about the latest changes from the IRS.
“I work remotely a great deal and essentially have access to my entire office from my laptop. I can share documents with clients securely and easily. For most uses in my business, it’s a legal violation to share documents by email attachments.” -Dave P., Accounting
What would you consider the minimum Technology requirements (tech stack) for tax and accounting firms?
The number one priority is a need for a secured means of communication. As mentioned before, encryption is needed as well as other security measures such as multi-factor authentication. As far as accounting software goes, it’s good to go with applications with plenty of integrations and are “product-agnostic,” meaning that it’s able to use common file types or is able to exchange data with any other software.
Once you’ve got a tax program that’s able to cooperate with other common applications and file-types, you can leverage that with software that supports automation to communicate and share data more efficiently. Secure file-sharing services, document management software, and electronic signature platforms are becoming more and more necessary to have in your arsenal.
Are you aware of any other pending legislation or actions that are in the works that will directly impact the tax and accounting profession and how business is done?
I think the most interesting things to look at going forward are how many of these changes to the tax process will stick around long-term. As we make these little concessions so that tax professionals are able to do their jobs remotely, and as we get more used to the technology, we could see some of these policy changes stick around.
What we do know is that despite these changes, professional tax preparers are being directed by the IRS to have a written data security plan to protect their clients. The memorandum from the IRS stated that these recent changes for allowed signatures / email tax documents is a “temporary deviation”. Though many are arguing that we need to make things easy to exchange, no one is saying we should relax security. Going forward, I think the IRS will continue to make security a priority and that they’re going to come down on those not following the practices that were put in places as law.
IRS Commissioner Chuck Rettig said “Protecting taxpayer data is not only a good business practice, it’s the law for professional tax preparers.”
The IRS also has a list of guidelines for safeguarding taxpayer data.
Do you have other pieces of advice that would help our readers manage through the COVID-19 crisis and to position themselves for success when we come out of this crisis?
I think it’s really important now more than ever to just not be afraid of change. A lot of businesses have been really hesitant to make these big changes because they’re just attached to the old way of doing things and not really willing to learn about the technology — but it’s looking like if they want to survive, then it’s a matter of when and not if.