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IRS Warns About New Cyber Scam Targeting Taxpayers

Last month, the United States (US) Internal Revenue Service (IRS) issued a warning to US taxpayers that cyber criminals are increasing their efforts to steal more detailed financial information from taxpayers in order to provide a more detailed, realistic tax return and better impersonate legitimate taxpayers. These efforts include targeting tax professionals, human resource departments, businesses, and other enterprises that store large amounts of sensitive financial information. To mitigate against this threat, the IRS recommended that taxpayers and businesses that store taxpayer information take three steps:

  • Use Security Software. Use security software with firewall and anti-virus protections, and ensure the security software is always turned on and can automatically update. Encrypt sensitive files stored electronically, such as tax records, and use strong and unique passwords for each account.
  • Watch Out For Scams. Recognize and avoid phishing emails, threatening calls and texts from individuals posing as legitimate organizations, such as banks or credit card companies, or even the IRS. Do not click on links or download attachments from unknown or suspicious emails.
  • Protect Personal Data. Don’t routinely carry Social Security cards and make sure tax records are secure. Shop at reputable online retailers. Treat personal information like cash – don’t leave it lying around.

Recently, the IRS issued a specific warning of a quickly growing scam involving erroneous tax refunds being deposited into taxpayer bank accounts. Specifically, after stealing client data from tax professionals and filing fraudulent tax returns, cyber criminals are using taxpayers’ real bank accounts for the deposits and then using various tactics to reclaim the refund from taxpayers. In one version of the scam, criminals posing as debt collection agency officials acting on behalf of the IRS contact taxpayers to say a refund was deposited in error, and ask the taxpayers to forward the money to their collection agency. In another version, the taxpayer who receives the erroneous refund gets an automated call with a recorded voice saying the person is from the IRS. That person then threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

In its new warning, the IRS repeats its call for tax professionals to increase the security of sensitive client tax and financial files, and outlines steps impacted individuals and enterprises may follow in the wake of a breach, including those outlined in Tax Topic Number 161-Returning an Erroneous Refund and the Taxpayer Guide to Identity Theft.

These new threats highlight the way cyber criminals are uniquely attempting to access sensitive personal information. As businesses increase their encryption and security efforts, these unique efforts by malicious actors will only increase. If you or your enterprise stores or transmits sensitive personal information, such as taxpayer identifying information, you should take time to audit your current practices surrounding how that data is secured, and how your relationships with third parties may impact that security. The Dentons cybersecurity team is prepared to help in those efforts.

Dentons is the world’s largest law firm, a leader on the Acritas Global Elite Brand Index, a BTI Client Service 30 Award winner, and recognized by prominent business and legal publications for its innovations in client service, including founding Nextlaw Labs and the Nextlaw Global Referral Network. The Dentons Privacy and Cybersecurity Group operates at the intersection of technology and law, and has been singled out as one of the law firms best at cybersecurity by corporate counsel, according to BTI Consulting Group.  

IRS Warns About New Cyber Scam Targeting Taxpayers

NIST Releases Draft Update To Cybersecurity Framework

In 2014, the National Institute of Standards and Technology (NIST) released its first version of the Framework for Improving Critical Infrastructure Cybersecurity (Cyber Framework). The Cyber Framework was originally developed as a voluntary framework to help private organizations and government agencies manage cybersecurity risk in the critical infrastructure space (e.g., bridges, power grid, etc.). Since then, it has been widely adopted across industry as a benchmark standard for measuring an enterprise’s cybersecurity readiness.

Following feedback NIST received in December 2015 from a Request for Information, and comments from attendees at the Cybersecurity Framework Workshop in 2016 held at the NIST campus in Maryland, NIST released a draft update to the Cyber Framework in January 2017 called Version 1.1. Some of the key changes in the draft update included:

  • Adding a new section on cybersecurity measurement to discuss the correlation of business results to cybersecurity risk management metrics and measures;
  • Expanding the use and understanding of cyber supply chain risk management frameworks;
  • Accounting for authentication, authorization, and identity proofing in the access control section of the framework; and
  • Better explaining the relationship between the various implementation tiers and profiles.

Last week, NIST released a second draft of Version 1.1, which is open for public comment through January 20, 2018. The new draft expands on issues such as supply chain security and vulnerability disclosure programs. It also emphasizes the need for companies using the framework to develop metrics to quantify their progress. NIST says it hopes to finalize Version 1.1 in the spring of 2018.

If you are interested in submitting comments on the new draft of Version 1.1, or learning more about its proposed changes that will likely take effect in 2018, the Dentons Privacy and Cybersecurity Group is ready to assist.

Dentons is the world’s largest law firm, a leader on the Acritas Global Elite Brand Index, a BTI Client Service 30 Award winner, and recognized by prominent business and legal publications for its innovations in client service, including founding Nextlaw Labs and the Nextlaw Global Referral NetworkDentons’ Privacy and Cybersecurity Group operates at the intersection of technology and law, and has been singled out as one of the law firms best at cybersecurity by corporate counsel, according to BTI Consulting Group.  

NIST Releases Draft Update To Cybersecurity Framework

HHS Issues Quick Response Cyber Attack Checklist

Last month, after the WannaCry ransomware attack infected 230,000 computers in 150 countries, the US Department of Health and Human Services (HHS) Office for Civil Rights (OCR) issued a “Quick-Response Checklist” for HIPPA covered entities and business associates to follow when responding to a ransomware attack or other “cyber-related security incident,” as that phrase is defined under the HIPAA Security Rule. 45 C.F.R. 164.304.

Checklist Recommendations

The checklist provides four recommendations:

  1. Execute the response and mitigation procedures and contingency plans. Entities should immediately fix any technical or other problems to stop the incident and take steps to mitigate any impermissible disclosure of protected health information (either done by the entity’s own information technology staff, or by an outside entity brought in to help).
  2. Report the crime to other law enforcement agencies. This includes state or local law enforcement, the FBI, or the Secret Service. The OCR makes clear that any such report should not include protected health information (unless otherwise permitted by the HIPPA Privacy Rule).
  3. Report all cyber threat indicators to federal and information-sharing and analysis organizations (ISAOs). A cyber threat indicator is defined under federal law as information that is necessary to identify malicious cyber activity. The US Department of Homeland Security, the HHS Assistant Secretary for Preparedness and Response, and private-sector cyber-threat ISAOs are all identified as acceptable information-sharing organizations under the new checklist. The OCR, however, makes clear that it does not receive reports from its federal or HHS partners.
  4. Report the breach to OCR as soon as possible, “but no later than 60 days after the discovery of a breach affecting 500 or more individuals.” Entities should notify “affected individuals and the media unless a law enforcement official has requested a delay in the reporting.” The OCR also presumes that all cyber-related security incidents where protected health information was accessed, acquired, used, or disclosed are reportable breaches unless the information was encrypted by the entity at the time of the incident or the entity determines, through a written risk assessment, that there was a low probability that the information was compromised during the breach. An entity that discovers a breach affecting fewer than 500 individuals has an obligation to notify individuals without unreasonable delay, but no later than 60 days after discovery. And the OCR must be notified within 60 days after the end of the calendar year in which the breach was discovered.

In the end, the OCR states that it considers “all mitigation efforts taken by the entity during any particular breach investigation,” including the voluntary sharing of breach-related information with law enforcement agencies and other federal and analysis organizations, as outlined in the checklist.

Takeaways

The OCR’s checklist makes clear that preparing for, and responding quickly to any potential breach should be a priority for HIPPA covered entities and their business associates. This includes preparing or updating enterprise wide incident response plans, training leadership, implementing effective governance programs, and having the ability to rapidly mobilize a response to malicious activity. Dentons’ global Privacy and Cybersecurity Group, in conjunction with Dentons’ leading healthcare practice, has extensive experience helping entities prepare and execute such plans and dealing with the rapidly changing legal and regulatory landscape that emerges in the aftermath of a security incident.

Dentons is the world’s largest law firm, a leader on the Acritas Global Elite Brand Index, a BTI Client Service 30 Award winner, and recognized by prominent business and legal publications for its innovations in client service, including founding Nextlaw Labs and the Nextlaw Global Referral Network. Dentons’ global Privacy and Cybersecurity Group operates at the intersection of technology and law, and was recently singled out as one of the law firms best at cybersecurity by corporate counsel, according to BTI Consulting Group.  

HHS Issues Quick Response Cyber Attack Checklist

DHS and FBI – Hackers Are Targeting US Nuclear, Energy, and Manufacturing Facilities

According to a new joint report issued by the US Department of Homeland Security (DHS) and Federal Bureau of Investigation (FBI), hackers have been penetrating the computer networks of companies that operate nuclear power stations, energy facilities, and manufacturing plants in the US since May 2017. The joint report carried an urgent amber warning, which is the second-highest rating for the sensitivity of a threat. The report was publicized by the New York Times last week.

According to the report, an “advanced persistent threat” actor was responsible for the attacks, which has included thus far:

  • Hackers writing targeted email messages containing fake resumes for control engineering jobs and then sending them to senior industrial control engineers who have access to critical industrial control systems. The resumes were Microsoft Word documents that contained malicious code. Once the recipient clicks on the document, the attackers copy the recipient’s credentials and access the network.
  • Hackers compromising websites they know their victims visit (watering hole attack).
  • Hackers redirecting the victims’ internet traffic through their own machines (man-in-the-middle attack).

The report does not say whether the cyber intrusions are an attempt at espionage, or part of a plan to cause physical damage. Nor is there any indication as to how many facilities were compromised. The report does state, however, that the hackers appear to be mapping out computer networks for future attacks.

In a joint statement issued by the DHS and FBI, a spokesperson for the DHS said “There is no indication of a threat to public safety, as any potential impact appears to be limited to administrative and business networks.” John Keeley, a spokesperson for the Nuclear Energy Institute (which works with the 99 utilities that operate nuclear plans in the US), said nuclear facilities are required to report cyber attacks that relate to their safety, security and operations. None have reported any cyber attacks thus far.

On May 11, as the attacks were ongoing, President Trump signed an executive order to strengthen the cybersecurity of federal networks and critical infrastructure.

If you or your enterprise is engaged in the energy or manufacturing sectors, cyber threat preparation and monitoring is your first line of defense against bad actors. Dentons’ team of cybersecurity experts can assist you in establishing and implementing an effective and compliant incident response plan and set of programs to monitor internal and external threats, including threat intelligence and access control and vulnerability assessments.

Dentons is the world’s largest law firm, a leader on the Acritas Global Elite Brand Index, a BTI Client Service 30 Award winner, and recognized by prominent business and legal publications for its innovations in client service, including founding Nextlaw Labs and the Nextlaw Global Referral Network. Dentons’ global Privacy and Cybersecurity Group operates at the intersection of technology and law, and was recently singled out as one of the law firms best at cybersecurity by corporate counsel, according to BTI Consulting Group.  

DHS and FBI – Hackers Are Targeting US Nuclear, Energy, and Manufacturing Facilities

President Trump’s Budget Requests $1.5B For Homeland Security Cyber Unit

President Trump’s new budget includes a request to increase cybersecurity personnel and funding across several federal departments, including $1.5 billion for the Department of Homeland Security’s (DHS) National Protection and Programs Directorate (NPPD). The NPPD is a DHS unit responsible for protecting US infrastructure from cyber threats. The DHS is responsible for protecting critical infrastructure and federal networks from cyber intrusions.

The budget document, released by the Office of Management and Budget earlier this morning, states: “The Budget supports the President’s focus on cybersecurity to ensure strong programs and technology to defend the Federal networks that serve the American people, and continues efforts to share information, standards, and best practices with critical infrastructure and American businesses to keep them secure[.]” The budget document also proposes to increase law enforcement and cyber personnel at DHS, the FBI and Department of Defense.

The President’s budget comes on the heels of his recent Executive Order aimed at strengthening cybersecurity across federal networks, critical infrastructure, and the nation writ large. It also comes in the wake of federal departments and agencies, such as DHS, Health and Human Services, and the Securities and Exchange Commission, focusing their efforts on cybersecurity in medical devicesmobile devices, financial services, and the Internet of Things (IoT).

 

President Trump’s Budget Requests $1.5B For Homeland Security Cyber Unit