Discussion:Are You Ready for the Red Flags Rule

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Discussion Forum Index --> Tax Questions --> Are You Ready for the Red Flags Rule

Jdugancpa (talk|edits) said:

7 August 2009
The AICPA News Update email I received today informs me that the FTC has announced postponement of its "red flag rule" requiring "creditors" to implement written policies and procedures to deter identity theft. http://www.ftc.gov/opa/2009/07/redflag.shtm This pushes back the deadline from August 1 to November 1. Under the rule, "financial institutions" and "creditors" will be covered. Guess what? If you don't get paid at the time you deliver your product, you are a creditor and will fall under the purview of this rule.

http://www.ftc.gov/bcp/edu/pubs/business/idtheft/bus23.pdf

The AICPA has request exemption from the rule for CPA's. Whether that request will be successful remains to be seen. How about you EA's? How about your client's? (Possible new revenue source??)

I guess now is the time to at least find out about this stuff.

Kevinh5 (talk|edits) said:

8 August 2009
this was in this week's NAEA EA Alert sent to members yesterday:

FTC Red Flags Rule

The Federal Trade Commission (FTC) has initiated an anti-fraud campaign, including a “Red Flags” regulation, requiring many small businesses to implement programs to identify, detect, and respond to the warning signs for identity theft. The Red Flags Rules may affect your business if you meet the definition of a “financial institution” or “creditor.” While enrolled agents are clearly not financial institutions, there is some uncertainty around the definition of creditor. The Fair and Accurate Credit Transactions Act of 2003 (FACTA), which is the basis for the Red Flags Rules, defines “creditor” as any entity that regularly extends or renews credit – or arranges for others to do so – and includes all businesses that regularly permit deferred payments for goods or services.


The deadline for compliance has been extended and is currently November 1, 2009. The FTC’s Red Flags Web site, www.ftc.gov/redflagsrule, offers resources to help determine if your business comes under these regulations and how to comply with the Red Flags Rule. At the same time, NAEA is working with the California Society of Enrolled Agents and others to interpret the rather broadly written FTC regulations in order to help you make the appropriate decisions for your business. We’ll provide more information as we are able, but should you have any questions, please drop the government relations team governmentrelations@naea.org an e-mail.

Smokeytax (talk|edits) said:

9 August 2009
I think we really should all have a written Identity Theft Protection policy for our business, that we review periodically.

This can be a selling point with our clients.

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