Choosing a professional representative is an important decision when dealing with a tax or other legal matter. Usually when you bring in a tax lawyer to handle your matter, you are dealing with an issue that is fairly serious. As such, it is important that you choose a tax lawyer that you feel comfortable with and that you trust with your personal financial information. Although naturally I would recommend myself for any tax matter listed on this website, I wanted to provide some helpful things to think about when choosing from the many tax lawyers that practice in your jurisdiction. Following these helpful hints will ensure that you pick a good one.
Business Law and Legal Topics
The BLT Mindset: Where’s the Bacon? (Or Why Lawyers Should Go to B-School)
Let me tell you a quick story. When I was a second year law student, I had an idea about how to provide the perfect tax return by combining the expertise of a CPA and a lawyer to tackle the preparation process. I had my million-dollar idea! So I sat on my couch with my laptop and said, “Ok, time to make this work.” And then I came to the realization that I did not know the first thing about what it took to run a business or where to start. And then I came to another realization that, if I did not know the first thing about running a business, what made me qualified to give people legal and tax advice about how to run their business. I could not answer that, so I went to business school.
The CAN-SPAM Act and Compliance Challenges for Startups
As our techno-centric culture increasing depends on email as a form of communication, an increasing amount of regulatory attention has been devoted to policing unsolicited bulk electronic communication, much of it unwanted, also known as “SPAM.” Although bulk mail has been in existence for decades, mass electronic messages are extremely inexpensive to produce and distributed, especially when programmers use cookies[1] or other “trolling” features to obtain them. While direct email marketing (along with search engine marketing) is widely considered as the next evolution for early-stage companies looking to raise awareness of their product/service, SPAM is viewed as a considerable annoyance by the general public. Users are often inundated with unsolicited messages and have to waste a lot of precious time sorting through a sea of junk mail, often risking the possibility that legitimate or important email messages will be lost while deleting unwanted mail messages from their inboxes.[2] In addition, a vast majority of the messages received are for products of suspect legality, scams, chain letters, and often pornographic material.[3]
Issues for Startups – Privacy, Privacy Protection, and Data Security
An increasing number of legal challenges for startups that utilize the Internet, are in the area of informational privacy protection. To date, there is no single piece of legislation or bill of rights which provides comprehensive regulation of the collection, storage, transmission or use of personal information.[1] Personal information is defined as data that is used to identify, contact, or locate a person, including name, address, telephone number, or email address. [2] Currently, protection of consumer privacy over the Internet is a piecemeal collection of various state and federal statutes. However, as users and regulators become increasingly savvy about the methods of data collection and its uses, that legislation slowly creates a framework that becomes of increasing importance to small businesses and startups that utilize the internet. The Federal Trade Commission has been particularly active in recent years in assessing the threats posed by online data collection and issuing several reports on the subject.[3] In particular, Congress has already taken action with respect to data collection obtained from minors.[4] Failure to take privacy issues into consideration may subject companies to federal or state action, in addition to consumer class action suits. Because enforcement actions are on the rise, startup companies must exercise particular vigilance in this area to protect themselves and the privacy of their users.
Privacy Issues that Arise for Startups Doing Business in or with the Residents of California
As in many other areas of law, the State of California has been on the front line of bringing about aggressive changes in the laws concerning protection for online consumers. The economic power and size of California, in addition to being the primary locus for much of the startup activity in the technological world, means that the cost of doing business for many companies includes compliance with California privacy law. Many elements of privacy protection, which are merely recommended by the Federal Trade Commission and other regulatory bodies, are required by statute in California. A prime example is the Online Privacy Protection Act. Technology law scholars, Richard Raysman and Peter Brown, note that the law “requires that any collection of personally identifiable information from California residents through a Web site or online service for commercial purposes be done pursuant to a conspicuously posted privacy policy.” [1] Federal law creates no such requirement for disclosure.
CAN-SPAM
Because of public vehemence toward SPAM communication, small businesses and startup must exercise extreme caution when engaging in electronic marketing or any other communication that is not specifically solicited by the user. Failure to do so, in addition to regulatory and civil penalties, can expose a new business to significant damage to their goodwill, which depending on the nature of the business could be fatal to an early-stage company. However, early stage companies can avoid violation of the CAN-SPAM act by engaging in good business practices related to electronic communications. Messages that are advertisements or that otherwise solicit business should identify themselves as an advertisement. The Federal Trade Commission has not issued guidelines on how to achieve disclosure, given the variance in messages and their layout it might be difficult to do so, but communicating in a manner that is clear to the recipient will generally comply with the requirements of the statute.[13] In addition, the message must provide to the recipient the identity of its sender, including critical contact information, such as physical address or registered post-office box and some other means of communication with the sender, such as telephone number or reply email address.
Issues for Startups – Privacy, Privacy Protection, and Data Security
Another key issue for startups when it comes to data security is ensuring compliance the Federal Trade Commission “disposal rule.” Originally implemented as a means as for combating identify theft of information stored on large corporate servers, the Disposal Rule is part of the Fair and Accurate Credit Transactions Act of 2003. In a nutshell, companies are required to implement certain safeguards when destroying electronic files so that these files cannot be read or reconstructed by unauthorized users. As it would pertain to startups, any customers lists, credit reporting data, medical information, and any sensitive financial information or confidential customer communications (relating to online communications companies) should be appropriately safeguarded and disposed of in a prudent fashion.[21]