Another reason to step up electronic data protection, retention

If you made a resolution that 2007 will be the year for enhancing protection for your business' electronic data, good for you. And in case you're already tempted to break that resolution, this might reconfirm your commitment.

Federal evidence rules were amended in December 2006. Last year, Morgan Stanley agreed to pay $15 million in fines to settle charges from the Securities and Exchange Commission that it failed to keep tens of thousands of emails sought in cases against the brokerage firm.

After that case, amendments were made to the Federal Rules of Civil Procedure, which took effect Dec. 1, 2006. Now, if your company is involved in civil litigation it must follow electronic discovery rules outlined in a 300-plus-page document created by the Judicial Conference of the U.S. Supreme Court's Committee on Rules of Practice and Procedure.

The new rules spell out that companies must properly manage and be able to retrieve electronic information in its original format. In addition, civil litigation parties must meet within 30 days of the suit's filing to determine what electronic data will be shared and in what format the data will be presented.

Almost one-third of IT managers and staffers surveyed by Computerworld late last year reported that they were not prepared to meet the new federal rules, while more than 40 percent indicated they did not know the state of their companies' preparation.

Hoax IRS e-mails really requests to steal your identity

Some clients of Leading Alliance firms have received official-looking e-mails purportedly from the Internal Revenue Service giving the recipient good news that a tax refund will be given in exchange for the individual sending personal information.

"That would never happen," reports Nick Hugunin, tax director at Lurie Besikof Lapidus. "The IRS does NOT have our clients' e-mail addresses and would not ask for Society Security numbers or other information."

The e-mails are an example of phishing—spam e-mails that look official so the recipient will click on the links in the e-mail and transmit personal information. The real sender then takes the details to steal the person's identity.

One note about the IRS e-mail—it says the IRS would get back to you in six to nine days. Hugunin notes that the average government response time is generally much longer.

Congress approves tax extenders, more

As 2006 came to a close, Congress passed and the president signed the Tax Relief and Heath Care Act of 2006. Among its provisions:

• Deduction for state and local taxes is extended through 2007.
• Above-the-line higher education deduction is extended through 2007.
• Research tax credit extended through 2007, with enhancements made to the credit for expenditures made in 2007.
• Work Opportunity and Welfare-to-Work are combined and extended through 2007.
• Recovery period of 15 years has been extended to certain leasehold and restaurant improvements.
• Placed-in-service deadline for GO Zone property extended until Dec. 31, 2010.
• Tax advantages of using health savings accounts are enhanced
• Several temporary energy incentives have been extended
• Qualified production activities deduction expanded to activities in Puerto Rico in 2006 and 2007.
• No change in the 15-percent tax rate on dividends from IC DISCs (Interest Charge Domestic International Sales Corporations).

Frank Landreneau, senior tax manager, PKF Texas

What things can't you live without?

Car. Washer. Dryer. Home air conditioning. Microwave. TV. Car air conditioning. Home computer.

All those items were cited as "necessities" by more than 50 percent of respondents in a recent survey by the Pew Research Center. The center sought to compare which items people considered a necessity in 2006 versus 1996.

Cell phones were cited by 49 percent in the 2006 survey, it did not even make the 1996 survey. Interestingly, the item that is seen as a necessity more today than it was in 1996 was the microwave (68 percent, more than double its 1996 citing).

"One pattern was consistent," the study reported. "Wherever there has been a significant change in the past decade in the public's judgment about these items, it's always been in the direction of necessity." e