Tag Archive for 2010

Cyberattacks Coming

Cyberattacks ComingDirector of national intelligence Dennis C. Blair, told lawmakers on Tuesday (02/03/2010) the prospect of a major terrorist attack on America, was the “primary near-term security concern of the United States.”  The New York Times reports that Mr. Blair began his annual threat testimony before Congress by saying that the threat of crippling cyberattacks on telecommunications and other computer networks was growing. America’s top intelligence official told Congress that an increasingly sophisticated group of enemies had “severely threatened” the sometimes fragile systems undergirding the country’s information infrastructure. “Malicious cyberactivity is occurring on an unprecedented scale with extraordinary sophistication,” he told the committee.

He said that the surge in cyberattacks, including the penetration of Google’s servers from inside China, was a “wake-up call” for those who dismissed the threat of computer warfare. “Sensitive information is stolen daily from both government and private-sector networks, undermining confidence in our information systems, and in the very information these systems were intended to convey,” Mr. Blair said The NYT says Mr. Blair’s emphasis on the threat points up the growing concerns among American intelligence officials about the potentially devastating results of a coordinated attack on the nation’s technology apparatus, sometimes called a “cyber-Pearl Harbor.”

Related articles

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Taxman Still Coming

Updated 04-13-2010 It is being reported that the U.S. House has scheduled for April 15th consideration of the Taxpayer Assistance Act of 2010. The bill’s major provision would remove cell phones and similar telecommunications devices as listed property, effective for tax years beginning after 2009.

Ways and Mean member John Lewis (D-GA) was expected to introduce the bill. It would include several individual taxpayer assistance measures. As offsets to the bill’s cost of $411 million, it would expand the bad-check penalty to electronic payments and increase information return penalties.

Taxman Still ComingBy 2013 mobile phones will overtake PCs as the most common Web access device worldwide according to Gartner forecasts. The IT research firm says the total number of PCs in use will reach 1.78 billion in 2013. By 2013, the combined installed base of smartphones and browser-equipped enhanced phones will exceed 1.82 billion units. These devices will be greater than the installed base for PCs afterward.

Gartner logoDespite these projections, the U.S. Internal Revenue Service (IRS) continues to treat mobile phones as a luxury.  According to an article on Mobile Enterprise,  since 1989 IRS tax regulations have identified the cellphone as “listed property.” A listed property is an item obtained for use in a business but designated by the tax code as lending themselves easily to personal use.

Tax policy

According to the IRS, “unless the employer has a policy requiring employees to keep records, or the employee does not keep records, the value of the use of the phone will be income to the employee.” The IRS goes on to say, “At a minimum, the employee should keep a record of each call and its business purpose. If calls are itemized on a monthly statement, they should be identified as personal or business and the employee should retain any supporting evidence of the business calls. This information should be submitted to the employer, who must maintain these records to support the exclusion of the phone use from the employee’s wages.

On the other hand, if the phone is employee-owned there are different tax rules. The IRS says “the listed property requirements do not apply. Any amounts the employer reimburses the employee for business use of the employee’s own phone may be excludable from wages if the employee accounts for the expense under the accountable plan rules.”

In June 2009 the IRS proposed to tax up to one-quarter of an employee’s use of a work cellphone. However, the IRS has since decided to let Congress handle the matter. IRS Commissioner Doug Shulman announced on January 8, 2010,  the IRS is now taking a “wait-and-see” attitude. The policy leaves its current regulations in place until Congress passes new legislation. Shulman said on the C-Span’s “Newsmaker” program: “We’re quite hopeful Congress is going to act on this. In the meantime, we’re not doing anything special or moving forward with any initiatives. Our hope is that there will be legislation to clean this up.

Senator John Kerry (D-MA) sponsored the Modernize Our Bookkeeping In the Law for Employees – Mobile Cell Phone Act of 2009, (S. 144/H.R. 690). The bill would remove mobile devices from the listed property rule to exempt them from the tax. The House approved the bill during the last Congress but is still in committee in the current session.

CTIA response

The Cellular Telecommunications & Internet Association (CTIA) trade association welcomed the news. In a Jan. 11, 2010, prepared statement CTIA President Steve Largent said, “The existing rule is an anachronism and it can’t be saved simply by giving it a facelift. That’s why we are focused on continuing to secure congressional support for the Mobile Cell Phone Act, which enjoys broad bipartisan support on both sides of the Capitol. It is our hope that Congress act soon to help employers and employees alike by repealing this absurd, outdated rule.” According to CTIA, employees are still required to maintain logs detailing their business use on a mobile device. The IRS expects individuals to record the following items, according to the CTIA:

  1. the amount of such expense or other items,
  2. the time and place of the use of the property,
  3. the business purpose of the expense, and
  4. the business relationship to the taxpayer of the persons using the property.

The results of the stalled legislation have been predictable. The article cites the example of Rocky Mount, VA, which stopped issuing cellphones to employees. Town employees whose job requires 24×7 availability via cell phone are required to buy their own phone. They will be given a flat stipend for using the phone for work purposes. If employees do not keep careful records, despite paying for their own cellphones for business purposes they may not be able to claim the service as a business deduction. The article notes that “For a for-profit business, the designation of an item as ‘listed property’ has implications for depreciation deductions taken by the business and the computation of net income.”

How to comply with existing tax rules

To comply with existing tax rules, Thompson’s Employer’s Guide to Fringe Benefits Rules says employers must satisfy the onerous substantiation requirements. They do this by requiring annotated monthly statements from employees to support deductions and employee income exclusions. Or firms must treat the value of the benefits as wages for Federal employment tax purposes and report this value as wages on Forms W-2.

For practical reasons, Thompson says, some employers opt to reimburse employees for cell phone purchases on an after-tax basis. This would negate the employer’s ownership of the phones and the requisite fixed asset tracking that follows. Employers should also provide reimbursements of service and usage fees on an after-tax basis unless they collect annotated documentation from employees to substantiate the reimbursements. Employers should either collect all monthly statements from employees. Otherwise, they should require employees to maintain those records to effectively respond if the IRS inquires into the claims.

What should a firm do if they provide employees with cellphones?

  1. Assess your existing policies for corporate-issued smartphones, and require employees to keep records of each call and its business purpose.
  2. Regularly audit smartphone records and require employees to reimburse the company for all personal use.
  3. Consider whether an individual-liable model for the cellphone users in your enterprise would work.
  4. Get involved and contact your Senator or Representative and tell them to update the IRS code.

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

YouTube Goes IPv6

 YouTube, one of the most popular, biggest time-wasters and bandwidth hogs on the web is now IPv6 too. Hurricane Electric, whose IPv6 backbone is the largest in the world, reports a 30x increase in IPv6 traffic originating from YouTube. Martin Levy, Director of IPv6 Strategy at Hurricane Electric told PCWorld in a recent article

On Thursday, midday California time, we saw a large amount of inbound IPv6 traffic, which we knew came from Google .. IPv6 traffic came into ISPs from all over the world when Google turned up its IPv6 traffic on YouTube.” Levy continued, “IPv6 is being supported at many different Google data centers. We’re talking about a traffic spike that is 30-to-1 type ratios. In other words, 30 times more IPv6 traffic is coming out of Google’s data centers than before.

The YouTube IPv6 traffic appears to be production, as opposed to a test because it has remained steady since it started and is following normal usage patterns, Levy told PCWorld, “This IPv6 traffic is mimicking classic end-user bandwidth shaping … It’s not machine driven; it’s human eyeball driven.”

Industry observers hailed the YouTube upgrade as a sign of the growing momentum for the next-generation Internet protocol, “This is not some IPv6-enabled scientific site…This is the mainstream media” Levy observes.

NetworkWorld reports that Google is anticipating IPv6 traffic growth as more devices such as LTE handsets and set-top boxes ship with IPv6 support. Google already supports IPv6 with its Search, Alerts, Docs, Finance, Gmail, Health, iGoogle, News, Reader, Picasa, Maps, Wave, Chrome, and Android products.

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Password Insecurity

password The massive Rockyou.com breach reveals the weakness of the password. The Rockyou.com breach provided an opportunity to evaluate the true strength of passwords as a security mechanism. California-based security firm Imperva analyzed the stolen cache of 32 million passwords and the results are not pretty. According to researchers, most passwords are eight or fewer characters and nearly 30% of passwords were six characters or less. They also found Nearly 50% of users used names, slang words, dictionary words, or trivial passwords (consecutive digits, adjacent keyboard keys, and so on), and 20 percent are from a pool of 5,000 passwords. The ten most common passwords used were:

  1. 123456
  2. 12345
  3. 123456789
  4. Password
  5. iloveyou
  6. princess
  7. rockyou
  8. 1234567
  9. 12345678
  10. abc123

Imperva“The problem has changed very little over the past 20 years,” explained Imperva’s CTO Amichai Shulman, referring to a 1990 Unix password study that showed a password selection pattern similar to what consumers select today. “It’s time for everyone to take password security seriously; it’s an important first step in data security. It’s important to point out that, the same password “123456” also topped a similar chart based on a statistical analysis of 10,000 Hotmail passwords published (Link removed at the request of Acunetix) October 2009 by Acunetix (Link removed at the request of Acunetix).

“Everyone needs to understand what the combination of poor passwords means in today’s world of automated cyber attacks: with only minimal effort, a hacker can gain access to one new account every second—or 1000 accounts every 17 minutes,” explained Shulman in a press release.

For enterprises, password insecurity can have serious consequences. “Employees using the same passwords on Facebook that they use in the workplace bring the possibility of compromising enterprise systems with insecure passwords, especially if they are using easy to crack passwords like ‘123456’,” said Shulman.

The rest of the passwords rated by popularity:

Imperva passwords

Some of the lessons that firms can lead from the Imperva research are:

1) Most users use short passwords which lack a lower-capital-numeric characters mix or trivial dictionary words which every decent brute-forcing/password recovery application can find in a matter of minutes.  A hacker will typically take 17 minutes to gain access to 1000 accounts.

2) Strong password algorithms must be coupled with longer passwords that contain a mix of letters, numbers, and, where possible, punctuation.

3) Firms should emulate Twitter’sbanned passwords” list consisting of 370 passwords that are not allowed to be used.

The analysis proves that most people don’t care enough about their own online security to give more than a fleeting thought when choosing the password which secures access to their accounts.  This research shows why firms must take proactive actions to manage their users’ choices in passwords.

PASSWORD RELATED SECURITY BEST PRACTICES:

• All passwords are to be treated as sensitive, confidential corporate information.
• Don’t use the same password for corporate accounts and non-corporate accounts (e.g., Facebook, Twitter, personal ISP account,  etc.).
• If someone demands a password call someone in the Information Security Department.
• Change passwords at least once every four months.
• Do not use the “Remember Password” feature of applications (e.g., Eudora, Outlook, Netscape Messenger).
• If an account or password is suspected to have been compromised, report the incident and change all passwords.

Strong passwords characteristics:
• At least eight (8) alpha-numeric characters
• At least one numeric character (0-9)
• At least one lower case character (a-z)
• At least one upper case character (A-Z)
• At least one non-alphanumeric character* (~, !, @, #, $, %, ^, &, *, (, ), -, =, +, ?, [, ], {, })
• Are not a word in any language, slang, dialect, jargon, etc.
• Are not based on personal information, names of family, etc.
• Are never written down or stored online.

Password  “dont’s”:
• Don’t reveal a password over the phone to ANYONE
• Don’t reveal a password in an email message
• Don’t reveal a password to the boss
• Don’t talk about a password in front of others
• Don’t hint at the format of a password (e.g., “my family name”)
• Don’t reveal a password on questionnaires or security forms
• Don’t share a password with family members
• Don’t reveal a password to co-workers while on vacation

OTHER PASSWORD-RELATED SECURITY BEST PRACTICES:
• Account Lockout: all systems should be set to “lockout” a user after a maximum of 5 incorrect passwords or failed login attempts
• Lockout Threshold: all systems should have a minimum “lockout” time of five (5) minutes
• Password History: systems should be configured to require a password that is different from the last ten (10) passwords

Related articles

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.

Privacy Day 2010

Privacy Day 2010Data Privacy Day is January 28, 2010.  Data Privacy Day is an international celebration of the dignity of the individual expressed through personal information according to its sponsors. In this networked world, in which we are thoroughly digitized, with our identities, locations, actions, purchases, associations, movements, and histories stored as so many bits and bytes, we have to ask – who is collecting all of this – what are they doing with it – with whom are they sharing it?

For its part, Google (GOOG) has released a video highlighting the ways it uses some of that personal data it collects about you to make your life easier and then explains that you can opt-out of some of Google’s data collection policies.

Nicrosoft logoMicrosoft (MSFT) has released the results of a study on data privacy.  According to the Microsoft survey, the results illustrate how we, as a society, are still grappling with the intersection of privacy and online life. For example, 63 percent of consumers surveyed are concerned that online reputation might affect their personal and/or professional life, yet, less than half even consider their reputations when they post online content.

Finally, Fewer than 15%  of consumers in any of the countries surveyed believe that information found online would have an impact on their getting a job.  The Microsoft study found 70% of surveyed HR professionals in the U.S. have rejected a candidate based on online reputation information. Reputation can also have a positive effect as in the United States, 86% of HR professionals stated that a positive online reputation influences the candidate’s application to some extent; almost half stated that it does so to a great extent.

Electronic Frontier FoundationFor its part, the Electronic Frontier Foundation (EFF) has published, “The E-Book Buyer’s Guide to Privacy ” which outlines six elements of Ebook readers’ privacy policies:

The EFF surveyed the policies and found that Google Books and Amazon Kindle will monitor what you’re reading. The EFF also found that all the E-book readers will keep track of book searches and book purchases.  The Kindle, Nook, and Reader shared information collected on your book selections, searches, and purchases is shared outside the company without your consent. The good news is that the a free, open-source FBReader (for Windows/Linux) does not collect data on your book selections or searches.

Google Books and Amazon Kindle will monitor what you're readingThese privacy issues are important for citizens and businesses. Firms have to consider whether they are complying with laws and regulations requiring consumer privacy protections. They know that customers have to trust their technologies and services before they will use and pay for them.

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedInFacebook, and Twitter. Email the Bach Seat here.