2019 ERO Program Compliance Training - RETURNING CLIENTS - FEE COLLECT v1 07/17/2018 - TPG

 
v1 – 07/17/2018

2019 ERO Program Compliance
          Training
  RETURNING CLIENTS – FEE COLLECT
SECTION ONE: 2019 Fee Collect Program
In partnership with your software provider and Santa Barbara Tax Products Group (TPG), you have elected to provide
Fee Collect options to your clients. Our portfolio of financial services and our commitment to customer service will help
you grow your business. We have summarized the Fee Collect Program below, but please refer to your software website
for additional detailed information.

The Fee Collect program offers a client product in which you can collect your fees directly from the taxpayer refund.
Unless there are delays by the IRS, refunds are received in less than 21 days from the time you file the tax return
electronically and you can rest easy knowing that you will get paid at the same time they get their refund. This product is
not a loan or a refund transfer.

All you have to do is file the return electronically and have the client sign a simple authorization allowing you to take out
your fees. Based upon our instructions, the bank does the rest, depositing your fees directly to your designated bank
account and depositing the remainder of the refund directly to the client’s account. It doesn’t get any easier…or any more
automatic. And best of all, you pay a flat rate per tax return for this service—far less than it would cost you to collect your
fees from a slow-paying client.

This is not a loan. The funds are deposited only when the IRS pays the refund, which is normally less than 21 days of
filing the return. Your clients can utilize the “Where’s My Refund” tool at the IRS to check on the status of their refund -
https://www.irs.gov/refunds. They may also log into their TPG account at www.sbtpg.com to get up-to-date information
about their Refund Transfer filing. Additional information is available through our help center and automated phone center
located on our website. If the IRS withholds the refund for some reason, then you don’t pay for the Fee Collect service.

   What's in it for you?
   • Business Growth: Accept more clients, including those you would typically turn away.
   • Payment Assurance: Lower risk of slow or no pays by having your fees taken out of the refund.
   • Fast Collections: Save time by eliminating collections work.
   • Improved Cash Flow: Receive payment when your client gets their refund.
   • Nominal Fee: Flat fee per transaction is a fraction of the cost of doing collections.

   What's in it for your clients?
   • Fast Refund: Get refund sooner than traditional mail.
•     Financial Convenience: No out-of-pocket cost to get return done.
   •     Trusted Accuracy: Confidence because you prepared their return.

Offer the Fee Collect Product Fairly
Explain the timing and costs associated with the fee collect product in comparison to the IRS options. It is your
responsibility to ensure that the taxpayer understands the IRS disbursement options, in which the taxpayer can have their
refund deposited directly into their personal bank account or as a check mailed to their home for FREE with paid tax
preparation. Explain that taxpayers generally choose a fee collect product so they can have their taxes professionally
prepared and pay tax preparation fees with their refund money.

                                                                                       Estimated               Deposit Product
Filing Method             Tax product                 Disbursement
                                                                                       Availability of Funds** Fee

                                                      IRS Direct Deposit or IRS
Paper Return              None                                                  5 to 7 weeks                       None
                                                      Issued Check

E-File                    None                        IRS Direct Deposit               Less than 21 days           None

E-File                    None                        IRS issued Check                 21 to 28 days               None

E-File                    Fee Collect*                Direct Deposit                   Less than 21 days           None
*Only a Fee Collect allows the tax preparer’s fees to be paid from the refund. The IRS cannot process tax preparer’s fees.
**The PATH Act (Protecting Americans from Tax Hikes) legislation may create funding delays of up to six weeks or more for
taxpayers filing at the beginning of the tax season. We encourage you to read about possible payment delays in more detail by viewing
the IRS website at https://www.irs.gov/individuals/refund-timing. Your clients can utilize the “Where’s My Refund” tool at the IRS to
check on the status of their refund - https://www.irs.gov/refunds.

Please remember to clearly explain all fees invoiced and disclosed on the Fee Disclosure form and ensure that
the taxpayer understands that the preparation fee will be deducted from the proceeds of their refund.

BE FAIR AND CLEAR. Please remember to explain all options available to the taxpayer.
        1. Do not pressure the taxpayer(s) into choosing a particular product.
2. Do not ask the taxpayer(s) what option they want before explaining all of the options available to them.
          3. Do not pick any option or options for the taxpayer(s).
          4. Do not encourage or discourage an applicant from using the Fee Collect product – only present the
             information and allow the customer to make their own decisions.

Please utilize our translated product forms when explaining product details to Spanish speaking clients. These forms are
available for download by going to the website (www.sbtpg.com). Spanish translations of product forms are provided for
your and your clients’ convenience. All contracts are in the English language, and English is the controlling language in all
contracts. Any non-English translation provided may not accurately represent the information in the original English.

MAKE SURE WE CAN CONTACT YOU. From time to time, TPG personnel may need to reach you regarding new
products available to you, compliance-related matters, or for other business reasons. Please ensure that your contact
information is up to date, including phone number and email address, so that if we need to reach you we can.
Question 1: Is the following statement True or False?

If the taxpayer chooses to use the Fee Collect on a refund due return, they will NOT have to pay
the tax preparer’s fees out-of-pocket as TPG will deduct them from their tax refund.

  a) True
     Correct.

     The Fee Collect product allows the taxpayer to pay for their tax preparation fee out of their tax refund.

  b) False
     Incorrect.

Question 2: Before accepting a customer’s decision to use a Fee Collect, you are required to
explain all options available to the customer. These options include IRS Free options.

According to the financial services agreement, you agree to present all disbursement options,
including free options available with the IRS, to the tax payer. You should also do which of the
following when explaining the Fee Collect product to taxpayers?

  a) Highlight the positive features of the Fee Collect Product and encourage the taxpayer to use this option. I
     will not recommend the IRS options since they are already posted on the IRS website.
     Incorrect.

  b) I will properly explain all options, including the IRS free filing options, to the taxpayer. I will not pressure,
     encourage or discourage a customer into using a Fee Collect product. I will only present the information
     and will allow the taxpayer(s) to make their own decision.
     Correct.

     The Financial Services Agreement requires that all options are provided to the taxpayer(s).
Question 3: As stated in the Financial Services Agreement, you confirm that you will provide the
taxpayer the proper product forms associated with using a Fee Collect product and will retain
signed copies on file in your office for TPG review, if requested.

The product forms include the following: Fee Collect Deposit and Payment Authorization Form
and the IRS 7216 use and disclosure forms. Which of the following statements are true?

  a) I am required to explain all product options to the taxpayer before proceeding with the Fee Collect product.
     This includes description for free product options. I am also required to retain signed documentation,
     such as the Fee Collect Deposit and Payment Authorization Form. I will be required to submit this to TPG
     if requested.
     Correct.

     The Financial Services Agreement requires that you provide the taxpayer all product options (including
     free product filing options) before proceeding with a tax product. Additionally, you are required to retain
     signed customer forms.
  b) I am required to explain all product options to the taxpayer before proceeding with the Fee Collect product.
     This includes description for free product options. I am also required to obtain signed documentation;
     however, I do not need to retain this on file.
     Incorrect.
Question 4: You are responsible for insuring that each taxpayer has had ample opportunity to
read the product documentation and the disclosures before the tax return is submitted. Do not
steer or pressure the customer into using a Fee Collect product. Please also ensure that the
taxpayer signs all tax product documentation.

When should taxpayers sign the documentation?

  a) After the Fee Collect Deposit and Payment Authorization form has been transmitted.
     Incorrect.

  b) After the tax return has been transmitted.
     Incorrect.

  c) After they have reviewed all the documentation but before the tax return and Fee Collect Deposit and
     Payment Authorization form are transmitted.
     Correct.

     The tax professional is required to obtain taxpayer signatures on the Fee Collect Deposit and Payment
     Authorization form before the forms are transmitted for processing. The tax professional should insure
     that the taxpayer has had ample time to read through the documentation and disclosures.

  d) Before they leave your office.
     Incorrect.
SECTION TWO: General Best Practices
We are excited to partner with you in the coming tax season and we have provided a few tips to help your office
stay current with general policies and procedures.

Please take extra precaution to guard your office from unauthorized access.

Guard access to the office. Remember that the office contains confidential information about taxpayers. Take the
necessary precautions to make sure unauthorized access does not occur. All office and access doors MUST be locked
when employees are offsite.

As a standard practice, do not leave office keys in visible view and limit office access.

When guests are onsite, please use monitoring practices, such as use of a guest pass or visitor log. Never allow guests
to freely roam the office while unattended. If an employee is terminated during tax season, the locks and any IDs or
passwords should be changed to prevent unauthorized access to the office(s).
Protect Your Customers’ Information
The Gramm-Leach-Bliley Act of 1999 (GLBA) sets forth standards to protect customer information stored in
electronic form as well as paper-based records. As part of regulatory compliance and TPG Best Practices, you
should take every precaution reasonably necessary to safeguard taxpayer confidential information. Confidential
information includes, but is not limited to, the following:

   •   Taxpayer Names
   •   Social Security Numbers
   •   Dates of birth
   •   Addresses
   •   Phone numbers
   •   Financial information such as loans and/or bank accounts
   •   Employer names and phone numbers
   •   Tax information
   •   Bankruptcy information

The TPG User Guide identifies the following Best Practice recommendations to safeguard electronic and physical
client information:

To Protect Electronic Documentation:
   • Password protect all computers that store client information
   • Use complex passwords and keep confidential (i.e. do not share passwords among staff).
   • Limit computers storing customer information to authorized users.
   • Set up computer screens away from public view.
   • If utilizing portable media use encryption.
   • Lock computers when not in use or when not monitored.
   • All computers used in the preparation of customer tax returns must run a regularly updated anti-virus software
      program (e.g. Symantec, McAfee, and Microsoft Security Essentials).
   • All computers used in the preparation of customer tax returns must be protected by a hardware or software firewall
      (e.g. router, Windows Firewall, Zone Alarm).
   • All computers used in the preparation of customer tax returns must store customer data in an encrypted format.
•   All computers used in the preparation of customer tax returns must provide secure file transfer capability (e.g.
       HTTPS, SFTP, FTPS).

To Protect Physical Documentation:
   • Safeguard physical customer files by utilizing a locked storage cabinet or drawer.
   • Do not leave customer information lying in plain sight.
   • Monitor visitors while onsite.
   • Shred all confidential documentation before trashing.

Whether you’re handing over paperwork, or providing taxpayer information over the phone, it’s important to
verify you’re talking to the actual taxpayer before doing so. Obtain information about the customer before
releasing any confidential information. Additionally, before releasing documentation, you are required to re-
verify the taxpayer through photo identification.

In today’s technology-saturated world, it becomes increasingly important to know how to recognize phishing
schemes. Phishing is a method fraudsters use to steal information by posing as a legitimate organization, often
over the phone or via email. For your protection and the protection of your clients, use the following tips to help
ensure you don’t become a victim:

   •   Never give out sensitive information under pressure if the source seems untrustworthy.
   •   If an email, call, or piece of mail is received that seems suspicious, question its source. When in doubt, contact the
       correct company directly and confirm if the request was real. The following are qualities that may indicate a
       phishing attempt:
           o An email or call that seems generic or not personalized, for example failing to reference an account you
              have
           o A piece of communication received requests personal passwords
           o An email is poorly written or contains low quality images of a company’s logos
   •   Do not click on links or download attachments from unknown or suspicious seeming emails.
   •   Keep your computer protected with an antivirus to block cyber-attacks.
   •   Keep up-to-date with the latest industry trends on this topic through the IRS and news sources.

Notify TPG and Affected Customers
If a customer’s information becomes compromised in any way, you are required to notify TPG immediately and
the affected customers.

If you think an unauthorized person has obtained, or is attempting to obtain taxpayer information, it is important to respond
quickly. Contact TPG immediately. If confidential information was compromised, you need to contact those customers
who were affected immediately. In accordance with the Financial Services Agreement, you should implement the
procedures and controls described in IRS Publication 4600 “Safeguarding Taxpayer Data: A Guide for Your Business”
available on the IRS website.
Question 5: As referenced in the TPG User Manual, you agree that you will take every reasonable
precaution to safeguard electronic and physical customer information. This supports the
requirements specified in the regulation called the Gramm-Leach Bliley Act of 1999 (GLBA).

Which of the processes below describe and support procedures that could be used to protect
client information?
  a) Utilize secured storage options to file physical customer information, such as locked drawers or cabinets.
     Incorrect.

  b) Monitor visitors while they are onsite.
     Incorrect.
  c) Encrypt and password protect all computers or electronic media devices which store electronic customer
     information and do not share passwords.
     Incorrect.

  d) Use regularly updated anti-virus and firewalls for software and hardware storing confidential client
     information.
     Incorrect.

  e) All of the above procedures will help to protect customer information.
     Correct.

     All of the above precautions are best practices which can be utilized to protect customer information.
Question 6: In the event of a data breach, such as unauthorized access to your computer or lost
physical files or media devices, you agree to implement the procedures and controls described
in IRS Publication 4600 “Safeguarding Taxpayer Data: A Guide for Your Business”, which is
available on the IRS website.

Additionally, you agree to take which of the following actions?
  a) Do not alert anyone until you have proof of fraudulent activity, such as confirmed identity theft.
     Incorrect.

  b) Immediately contact TPG and those customers that were affected.
     Correct.

     The TPG User Manual requires that you notify TPG and all customers that were affected by the data
     breach. This is required in addition to implementing the procedures and controls described in IRS
     Publication 4600.

  c) None of the above procedures are correct.
     Incorrect.

  d) All of the above procedures are correct.
     Incorrect.
Question 7: Before providing confidential client information via telephone you are required to
validate the caller. Additionally, if the taxpayer comes back to the office to pick up their
refund check, you agree to validate the taxpayer’s identity before distributing the refund
check.

a) The Statement is True
   Correct.

   You must validate the client identity before releasing any information via telephone. Additionally, you
   must validate the customer before releasing payment. This can be accomplished by viewing the photo
   identification of the taxpayer.

b) The Statement is False
   Incorrect.
SECTION THREE: Identify the Taxpayer before
                 Filing the Tax Return
                                YOU ARE RESPONSIBLE TO KNOW YOUR CUSTOMER

TPG is committed to ensuring that neither we nor you as an ERO participate in the submission of fraudulent tax returns to
the IRS. It is essential, therefore, that you undertake reasonable efforts to ensure that the taxpayer whose refunds you
will be submitting via TPG and its Banks, is, in fact, the correct taxpayer to be submitting the return, and that the return is
accurate, and that you reasonable have identified and verified the identity of the taxpayer using your service.
FRAUD/ANTI-MONEY LAUNDERING CONTROLS

You should not file a tax return if you suspect fraudulent activity.

The number of fraudulent tax returns filed electronically continues to increase each year. Below is a list of
possible fraud indicators. This is not intended to imply that every return with one or more of the following
characteristics is fraudulent. It will be considered good business practice, however, to verify or validate data that
might be considered questionable. Taxpayers are disqualified from applying for financial products if the tax
preparer cannot obtain or verify the required information.

Possible Taxpayer Fraud Indicators:
  • Documents provided for identification appear to have been altered or forged.
  • Photograph or physical description on the identification is not consistent with the appearance of the applicant or
      customer presenting the identification.
  • Other information on the identification is not consistent with information given for tax return preparation.
  • Taxpayer cannot be reached at the phone number given.
  • Taxpayer cannot produce any mail or written documentation with their reported name and address.
  • Taxpayer appears to be following a script.
  • Suspicious person accompanying filer and observed on previous occasions.

Possible Social Security Card Fraud Indicators:
  • Social Security number that has any of the three groups all zeros
•   Social Security number that has the first three numbers above 900
   •   Social Security number that has the first three numbers of 666

Possible Forms W-2, Forms 1099 and Forms 4852 Fraud Indicators:
  • Forms that are typed, with strikeouts, erasures, white outs or type-overs
  • Forms that are handwritten or photocopied
  • Forms that are incomplete or altered
  • Forms that contain errors in income or SSN
  • Taxpayer presents employer’s copy of W-2
  • Employer Identification Number (EIN) is not nine digits or is missing
  • Dollar signs used on the W-2s or 1099s
  • No cents are indicated (e.g. 5,000 is shown, instead of 5000.00)
  • Federal Withholding is greater than 20% of W-2 box 1 wages
  • W-2s for a firm in the area differs from other W-2s issued from the same firm

Possible Tax Return Fraud Indicators:
  • Maximum EITC is claimed but taxpayer is unable to supply required information on dependent or spouse/other
      parent
  • Claiming dependents other than their own children or grandchildren with no supporting documents
  • An unusually high number of dependents born during the year
  • A high number of returns claiming almost the maximum Earned Income Credit
  • An unusually high number of refunds over $2000
  • Many returns with identical income, withholding, refunds, or EINs on multiple W-2s

The definition of Money Laundering is:
   • The process of converting illegally-obtained funds into clean funds.
   • •        A primary method utilized by money launderers is introducing the illicit funds into the mainstream financial system
      and moving the funds via a variety of techniques to make them appear clean

The risk of introducing illegally obtained funds into the banking system can be identified in our program as identity theft
and tax return fraud. Below are the steps you must take to properly identify the customer and to prevent fraud.
To protect yourself from processing invalid tax returns, you are responsible to validate the identity of your client
before filing a tax return. Best practice processes to verify your customer’s identity can be accomplished
through the following procedures:

      Collect customer demographic information:
                - Name
                - Physical address
                - Tax Identification Number and
                - Date of birth

      Verify the information through documentation:
                  - Unexpired government issued photo identification
                  - Supporting documents for the Tax Identification Number (i.e. social security cards)
                  - Tax documentation such as W-2s or 1099s

The identity of each taxpayer and dependent should be verified to a reasonable and practical extent. If you are
suspicious of the client’s identity, perform additional due diligence by asking to see additional information. As
part of the financial services agreement, you agree to carefully review the identity of each taxpayer before filing
the tax return. Employees and business partners responsible for filing tax returns need to be aware of these due
diligence procedures.

You should not file the tax return if you cannot verify the taxpayer’s identity.

   a) Question 8:   To ensure you are not facilitating possible fraud and/or money laundering,
      you agree to create and implement the following: A Taxpayer identification program to identify and
      validate the identity of each taxpayer and dependent. Identity will be validated through documentary and
      non-documentary methods for each member listed on the return.
      Correct.

      .
b) A Taxpayer Identification Program to validate the identity of each taxpayer and dependent. Identity should
   be validated by reviewing the taxpayer (and any dependent’s) government issued identification. This
   identification does not need to include a photograph.
   Incorrect.

c) A Taxpayer Identification Program to validate the identity of each taxpayer and dependent. Identity should
   be validated by reviewing the social security cards for each applicant. No other information should be
   validated.
   Incorrect.
Question 9: As part of your financial services agreement, you agree that you will collect and
validate which of the following pieces of taxpayer information before filing the tax return?
  a) Ask the taxpayer for their name, address, telephone number, and W-2 forms;
     Incorrect.

  b) Review the taxpayer (and any dependent’s) expired government issued identification to validate their
     identity;
     Incorrect.

  c) At a minimum, the taxpayer should provide their name, physical address, tax identification number, and
     date of birth. The tax professional must validate this information by reviewing at least one form of
     unexpired government issued photo identification. Additionally, the tax professional must review the
     social security cards for the primary and secondary filers, as well as all dependent children listed on the
     tax return.
     Correct.

     To properly validate the identity of your client, you should collect the name, physical address, tax
     identification number, and date of birth. Additionally, you should review at least one unexpired
     government issued photo identification and the social security cards for each individual listed on the tax
     return.
Question 10: If you are presented fraudulent or suspicious documentation and cannot
reasonably confirm the identity of the taxpayer, you agree that you will do which of the
following?

  a) Perform additional due diligence by asking for additional verification, such as asking for utility bills, credit
     cards, or personal references. You should also verify sources of income and validate data that looks
     questionable.
     Incorrect.

  b) If you suspect fraud, you should refuse to file the return.
     Incorrect.

  c) All of the above answers are correct.
     Correct.

     If you are suspicious of the identity of the client, ask for additional verification such as utility bills, credit
     cards or personal references. You should also scrutinize income documentation such as W-2s and other
     subjective or non-verifiable data used on forms and schedules. If the tax return information looks
     suspicious, verify sources of income and validate data that looks questionable. You can also contact TPG
     and ask to speak with our risk department. If you suspect fraud, you should not file the return. Filing a
     return when you suspect fraud could result in your being inactivated from our program.
SECTION FOUR: Certification
In order for Enrollment to be activated, please have ALL employees, contractors or others under your EFIN, who
will be offering or discussing tax products with customers to successfully complete the online program
compliance training.

I CERTIFY THAT I HAVE READ, UNDERSTAND AND
  AGREE TO ABIDE BY THE TERMS PROVIDED TO
  ME IN THE PROGRAM COMPLIANCE TRAINING.

   ❑        Yes
   ❑        No
[Pop Up Hint:]
**Applies to Questions #1-4

What methods should I use to offer taxpayers the Fee Collect product?

You should present all options to the taxpayer, including the free options provided by the IRS. Explain that taxpayers
generally choose a Fee Collect product so they can have their taxes professionally prepared and pay tax preparation fees
with their refund money. Additionally, a Fee Collect product allows unbanked customers the benefit of having their refund
direct deposited rather than receiving a check in the mail from the IRS in 21 to 28 days.

Please remember to ensure that each taxpayer has had ample opportunity to read the product Application and the
disclosures before the tax return is submitted. Do not steer or pressure the customer into purchasing a tax product.
Please also ensure that the taxpayer signs all tax product documentation.

What is the timing difference related to using a Fee Collect product versus using the IRS options?

                                                                                  Estimated               Deposit Product
Filing Method            Tax product                Disbursement
                                                                                  Availability of Funds** Fee

                                                    IRS Direct Deposit or IRS
Paper Return             None                                                 5 to 7 weeks                    None
                                                    Issued Check

E-File                   None                       IRS Direct Deposit            10 to 21 days               None

E-File                   None                       IRS issued Check              21 to 28 days               None

E-File                   Fee Collect*               Direct Deposit                10 to 21 days               None
*Only a Fee Collect allows the tax preparer’s fees to be paid from the refund. The IRS cannot process tax preparer’s fees.
**The PATH Act (Protecting Americans from Tax Hikes) legislation may create funding delays of up to six weeks or more for
taxpayers filing at the beginning of the tax season. We encourage you to read about possible payment delays in more detail by
viewing the IRS website at https://www.irs.gov/individuals/refund-timing. Your clients can utilize the “Where’s My Refund” tool at the
IRS to check on the status of their refund - https://www.irs.gov/refunds.

Do I need to give the taxpayer copies of the Fee Collect forms?

Yes; you are supposed to provide the taxpayer a copy of the signed Fee Collect Deposit and Payment Authorization
Form, together with any other supporting product documents (i.e. the tax return and 7216 consent to use and disclose
forms).

What documentation does TPG require that I retain?

The Financial Services Agreement requires that you retain, with respect to each Customer:
   • A paper or electronic copy of the Customer’s signed Fee Collect product forms
   • Copies of all the tax returns, W-2s, and (to the extent feasible) taxpayer identifications.
      Note: In some states retaining copies of identification is illegal, so please abide by your state legislation.

How long do I need to retain the tax product documentation?

We ask that you retain the tax product related documentation for a period of five (5) years. Upon request, the Financial
Services Agreement requires that you deliver this tax product documentation to TPG within 48 hours.

[Pop Up Hint:]
**Applies to Questions #5-7

It is important that we work together to ensure that confidential taxpayer information is protected from unauthorized
access by third parties. Tax professionals should utilize proper physical and electronic storage options to ensure that
taxpayer information is restricted from unauthorized access.

What is confidential client information?

Confidential information includes, but is not limited to, the following:

   •   Taxpayer Names
   •   Social Security Numbers
•   Dates of birth
   •   Addresses
   •   Phone numbers
   •   Financial information such as loans and/or bank accounts
   •   Employer names and phone numbers
   •   Tax information
   •   Bankruptcy information

How can I reasonably protect my client’s physical information?

Stay organized and make certain taxpayer paperwork is stored security away from public view. In order for paperwork to
be secure in storage, it should be under lock and key. Always put away a customer’s files before you begin working on
another customer’s account. Make sure that customers do not have access to areas where confidential information is
stored. If transported between offices, files should be secured during transport (e.g. a car trunk). Make sure all
paperwork is completely shredded before discarding.

How can I reasonably protect my client’s electronic information?

Have safeguards in place to protect the files that are generated and stored on the computer. It is important to follow them
and not deviate from policy when dealing with computers to prevent an unauthorized person from gaining access to or
stealing the data on your computers. The following are standard practices adopted by most users:
All computers used in the preparation of customer tax returns must require users to login to the operating system with a
unique user ID and complex password before gaining access to the computer or tax preparation software. Do not share
your passwords and make sure to log out of computers when you walk away from them.
    • All laptop computers should utilize a cable lock for security.
    • All computers used in the preparation of customer tax returns must run a regularly updated anti-virus software
       program (e.g. Symantec, McAfee, or Microsoft Security Essentials).
    • All computers used in the preparation of customer tax returns must be protected by a hardware or software firewall
       (e.g. router, Windows Firewall, Zone Alarm).
    • All computers used in the preparation of customer tax returns must store customer data in an encrypted format.
    • All computers used in the preparation of customer tax returns must provide secure file transfer capability (e.g.
       HTTPS, SFTP, FTPS).
What other safeguards can help protect the taxpayer?

Be aware of your surroundings before discussing a taxpayer’s personal and confidential information whether in face to
face settings or during phone calls. Create an environment in your office which allows for customer privacy. Best practice
would be to have sound barriers in between customers so as to ensure privacy of conversation.

Whether you’re handing over paperwork or providing taxpayer information over the phone, it’s important to verify you’re
talking to the actual taxpayer before doing so. Obtain a photo ID before turning any information over to the customer.

Guard access to the office. Remember that the office contains confidential information about taxpayers. Take the
necessary precautions to make sure unauthorized access does not occur. All office and access doors MUST be locked
when employees are offsite. If an employee is terminated during tax season, the locks and any IDs or passwords should
be changed to prevent unauthorized access to the office(s).

What do I do in the event of a data breach?

If you think an unauthorized person has obtained, or is attempting to obtain taxpayer information, it is important to respond
quickly. Contact TPG immediately. If confidential information was compromised, you need to contact those customers
who were affected.

Federal laws are in place to ensure that the identity of individuals who open accounts with financial institutions can be
verified and that unusual banking transactions are reported to the proper authorities. In accordance with the Financial
Services Agreement, you should implement the procedures and controls described in IRS Publication 4600 “Safeguarding
Taxpayer Data: A Guide for Your Business” available on the IRS website.

[Pop Up Hint:]
**Applies to Questions #8-10

The Taxpayer Identification Program is intended to provide a reasonable belief about the true identity of the applying
customer.
What do I need to collect?

At minimum, the tax professional should collect the following identifying information from each customer before applying
for a tax product:

    •   Name
    •   Date of Birth
    •   Physical Address
    •   Tax Identification Number

What is my responsibility?

Client identity should be verified by the tax professional before proceeding with the transaction. Verification can be
accomplished by viewing the following documentation:

    •   Unexpired government issued photo identification for each individual listed on the return (taxpayer and
        dependents)
•       Verification of Tax ID Number, such as viewing the taxpayer’s social security card
•       Tax forms, such as W-2s and 1099 forms.

Photocopies of the picture identification and SSNs should be made and kept as part of the taxpayer’s file where allowable
by law. Please check your state legislation to ensure you are allowed to maintain copies of client information.

What do I do if I am suspicious of the identity of a client?

If you are suspicious of the identity of the client, ask for additional verification such as utility bills, credit cards or personal
references. You should also scrutinize income documentation such as W-2s and other subjective or non-verifiable data
used on forms and schedules. If the tax return information looks suspicious, verify sources of income and validate data
that looks questionable. You can also contact TPG and ask to speak with our risk department. If you suspect fraud, you
should not file the return. Filing a return when you suspect fraud could result in your being inactivated from our program.
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