Eagle Business Solutions Blog: April 2008

Saturday, April 19, 2008

Independent Contractors vs. Employees (Worker Classification)

Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be:

An independent contractor
An employee (common-law employee)
A statutory employee
A statutory nonemployee

In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.

Common Law Rules

Facts that provide evidence of the degree of control and independence fall into three categories:

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

Form SS-8

After reviewing the three categories of evidence, if you are still unsure if a worker is an employee or an independent contractor, the business can file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status.

Be aware that it can take up to six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form Form SS-8 (PDF).

Employment Tax Obligations

Once a determination is made (whether by the business or by the IRS), the next step is filing the appropriate forms and paying the associated taxes.

Misclassification of Employees

Consequences of Treating an Employee as an Independent Contractor - If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker (the relief provisions, discussed below, will not apply). See Internal Revenue Code section 3509 for more information.

Relief Provisions - If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. To get this relief, you must file all required federal information returns on a basis consistent with your treatment of the worker. You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. See Publication 1976, Section 530 Employment Tax Relief Requirements (PDF) for more information.

Misclassified Workers Can File Social Security Tax Form - Workers who believe they have been improperly classified as independent contractors by an employer can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report the employee’s share of uncollected Social Security and Medicare taxes due on their compensation. See the full article Misclassified Workers to File New Social Security Tax Form for more information.

References/Related Topics

Worker Classification Webcast A critical issue for all businesses is properly classifying workers as employees or independent contractors. The IRS’s archived Tax Talk Today Webcast, “What’s Hot in Employment Taxes: Independent Contractor or Employee?,” focuses exclusively on worker classification issues.
IRS Internal Training: Employee/Independent Contractor (PDF)This manual provides you with the tools to make correct determinations of worker classifications. It discusses facts that may indicate the existence of an independent contractor or an employer-employee relationship. This training manual is a guide and is not legally binding.
Form SS-8 (PDF)Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
Publication 15-A (PDF)The Employer's Supplemental Tax Guide has detailed guidance including information for specific industries.
Publication 15-BThe Employer’s Tax Guide to Fringe Benefits supplements Circular E (Pub. 15), Employer's Tax Guide, and Publication 15-A, Employer's Supplemental Tax Guide. It contains specialized and detailed information on the employment tax treatment of fringe benefits.
Businesses with Employees
Hiring Employees
Online Classroom, Lesson 6 - What you need to know about federal taxes when hiring employees/contractors
Distinguishing Between Self-Employed Individuals and Independent Contractors
Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Independent Contractor
People such as lawyers, contractors, subcontractors and auctioneers who follow an independent trade, business, or profession in which they offer their services to the public, are generally not employees. However, whether such people are employees or independent contractors depends on the facts in each case.

The general rule is that an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result.

Example: Vera Elm, an electrician, submitted a job estimate to a housing complex for electrical work at $16 per hour for 400 hours. She is to receive $1,280 every 2 weeks for the next 10 weeks. This is not considered payment by the hour. Even if she works more or less than 400 hours to complete the work, Vera Elm will receive $6,400. She also performs additional electrical installations under contracts with other companies that she obtained through advertisements. Vera is an independent contractor.

Employee (Common-Law Employee)
Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.

Example: Donna Lee is a salesperson employed on a full-time basis by Bob Blue, an auto dealer. She works 6 days a week, and is on duty in Bob's showroom on certain assigned days and times. She appraises trade-ins, but her appraisals are subject to the sales manager's approval. Lists of prospective customers belong to the dealer. She has to develop leads and report results to the sales manager. Because of her experience, she requires only minimal assistance in closing and financing sales and in other phases of her work. She is paid a commission and is eligible for prizes and bonuses offered by Bob. Bob also pays the cost of health insurance and group-term life insurance for Donna. Donna is an employee of Bob Blue.

Statutory Employees
If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute (statutory employees) for certain employment tax purposes if they fall within any one of the following four categories and meet the three conditions described under Social Security and Medicare taxes, below.

A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.
A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.
An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done.

A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer’s business operation. The work performed for you must be the salesperson's principal business activity.

Refer to the Salesperson section located in Publication 15-A, Employer's Supplemental Tax Guide (PDF) for additional information.

Social Security and Medicare Taxes
Withhold Social Security and Medicare taxes from the wages of statutory employees if all three of the following conditions apply.

The service contract states or implies that substantially all the services are to be performed personally by them.
They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in transportation facilities).
The services are performed on a continuing basis for the same payer.

Statutory Nonemployees
There are generally two categories of statutory nonemployees: direct sellers and licensed real estate agents. They are treated as self-employed for all Federal tax purposes, including income and employment taxes, if:

Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked, and
Their services are performed under a written contract providing that they will not be treated as employees for Federal tax purposes.

Refer to information on Direct Sellers located in Publication 15-A, Employer's Supplemental Tax Guide (PDF) for additional information.

Forms and Associated Taxes for Independent Contractors

Form W-9
If you’ve made the determination that the person you’re paying is an independent contractor, the first step is to have the contractor complete Form W-9 (PDF), Request for Taxpayer Identification Number and Certification. This form can be used to request the correct name and Taxpayer Identification Number, or TIN, of the worker. A TIN may be either a Social Security Number (SSN), or an Employer Identification Number (EIN). The W-9 (PDF) should be kept in your files for four years for future reference in case of any questions from the worker or the IRS.

Form 1099-MISC
Form 1099-MISC (PDF) is most commonly used by payers to report payments made in the course of a trade or business to others for services.

If you paid someone who is not your employee, such as a subcontractor, attorney or accountant $600 or more for services provided during the year, a Form 1099-MISC (PDF) needs to be completed, and a copy of 1099-MISC (PDF) must be provided to the independent contractor by January 31of the year following payment. You must also send a copy of this form to the IRS by February 28 (although the form does not have to be sent to the IRS until March 31 if the business files the 1099s electronically, using the FIRE system).

Also note that independent contractors may have their own employees or may hire other independent contractors (subcontractors). In either case, they should be aware of their tax responsibilities, including filing and reporting requirements, for these workers.

There are certain situations where a 1099 is not required. These exceptions are listed in the 1099 Instructions (PDF).

Filing Electronically
The Filing Information Returns Electronically (FIRE) system is set up for financial institutions and others to file Information Return Forms 1042-S, 1098, 1099, 5498, 8027 or W-2G. Information Returns can be filed electronically, however, you must have software that can produce the file in the proper format as required by Publication 1220. FIRE does not provide an electronic fill-in form option. For additional information on FIRE software, please visit the FIRE software vendors Web page.

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Monday, April 7, 2008

Guide to Internet Terms: A Glossary

Guide to Internet Terms: A Glossary

Our number one objective is to help you grow your small business! For more information visit Eagle Business Solutions, Inc. Eagle Business Solutions is a small business consulting firm specializing in helping individuals start and grow their businesses. We focus on the application of Information Technology and Small Business Operations Management to further our clients' business objectives.

Access - Refers to the user's ability to view the data collected about him or her, and to challenge its accuracy and completeness. Access is the third principle of " fair information practices, along with (1) Notice, (2) Choice, and (4) Security.

Affirmative Confirmation - Refers to a site's or an Internet Service Provider's use of personal data to tailor or modify the content or design of the site to specifications affirmatively selected by a particular individual. For example, you may permit a shopping site to use the record of your book purchases to make recommendations of other publications that may interest you. The site will thus display a list of its recommendations every time you visit.

Aggregate - A collection of information in which no individual information can be distinguished or identified. Aggregated information can be used to determine the characteristics of a group, such as "Sixty percent of our users are over 35."

Anonymity (also see Pseudonymity and Pseudonymous Profiling) - A recipient cannot reply to the message and that email sender's identity (identity meaning the user's real email address or other identifying information such as IP address data) is not known and cannot be known -- even by the tool company.

Anonymizer - An anonymizer is essentially a shield between your computer and the Internet that relays Web traffic through an intermediary server. It hides personally identifying information--such as IP address, browser software used, surfing patterns, etc.--from any Web site you visit, and prevents sites from adding any cookies or other files to your computer. Anonymizers working in the same way as many firewalls.

AntiVirus Software - Detects and removes computer viruses.

Applet - A small Java program which allows a file or Web page to display animation, calculators, sound effects or other interactive functions. (See also "Java")

Bandwidth - The rate at which information travels through a network connection, usually measured in bits per second, kilobits (thousand bits) per second, or megabits (million bits) per second.
BBBOnLine - The Better Business Bureau's Online privacy seal program that certifies eligible Web sites, holding sites to baseline privacy standards. The program requires its licensees to implement certain fair information practices and to submit to various types of compliance monitoring in order to display a privacy seal on their Web sites.

Bit - The smallest element of computerized data. A full text page in English is about 16,000 bits. (See also "Byte")

Blacklist - A list of "bad" email addresses (spam) or inappropriate Web sites. Some filtering and blocking tools can be set up to prevent access to Web sites on the blacklist or to prevent email from addresses on the blacklist from entering your inbox.
Blocking software - Computer programs that filter content from the Internet and block access to some Web sites or content based on specified criteria. Parents, teachers, or caregivers can use blocking software to prevent access to certain Web sites and other information available over the Internet. (See also "Client-based filter" and "Filtering software")

Blog - Short for Web log. A blog is a Web site to which one or more people post their personal observations on particular subjects. Postings to blogs typically are frequent and consistent. Much of the power of blogs stems from automated templates that allow users to post news, information, links, images, or other media to an existing blog.

Bookmark - A file within a browser in which an Internet user can save the addresses of interesting or frequently used Web sites, so that they are readily available for re-use.
Browser - A program that allows a user to find, view, hear, and interact with material on the World Wide Web. Netscape Navigator and Microsoft Internet Explorer are examples of popular browsers.
Browser hijacker - A common spyware program that automatically changes your web browser's home page, even if you change it back.

Bulletin board - An area of a Web site where users can post messages for other users to read. In most cases, readers can contact the author of a bulletin board message by e-mail. (See also "chat," chat room," and "Discussion group")

Bundling - Most often, this refers to the inclusion of software components to complement a purchase of hardware. This term can also refer to the process by which some unwanted spyware can enter your computer, by surreptitiously downloading alongside other, more desirable downloads.

Byte - A unit of measure of computer memory. A byte generally represents one character, such as "A," and is made up of eight bits. (See also "Bit")

Cache - A file on the hard drive in which a Web browser stores information such as addresses, text, and graphics from recently visited Web sites, making it easier and faster for the user to revisit a site.

CD-ROM (Compact Disk - Read Only Memory) - A computer storage medium which can store large amounts of information; generally used to distribute software or multi-media for use on computers with CD-ROM drives. CD-ROM disks look just like music CDs, and cannot be altered by a user.

Chat - A feature offered by many online services or Web sites that allows participants to "chat" by typing messages which are displayed almost instantly on the screens of other participants who are using the chat room. Chatting is one of the most popular uses of the Internet. Generally the participants remain anonymous, using nicknames or pseudonyms to identify themselves online.

Chat room - The name given to a place or page in a Web site or online service where people can "chat" with each other by typing messages which are displayed almost instantly on the screens of others who are in the "chat room." Chat rooms are also called "online forums."

Choice - Refers to companies' providing consumers with options regarding whether and how personal information collected from them may be used for purposes other than those for which it was provided.

Client-based filter - A software program that a user installs on his or her own computer to monitor Internet use, block access to specific types of material, prevent kids from accessing the Internet at certain times, or prevent kids from revealing personal information online. (See also "Filtering software" and "Blocking software")

Compact Policy - A condensed version of a Web site's privacy policy used by cookies to reflect the data that they collect.

Computer Information - Information about the computer system that the individual uses to access the network -- such as the IP number, domain name, browser type or operating system.
Consent - Explicit permission, given to a Web site by a visitor, to handle personal information in specified ways.

Content - The actual text of a communication or information sent. Includes text of e-mails, bulletin board postings, chat room communications, files and graphics. Content does not include routing information, the date, time, or subject of the message, or other transactional data.

Cookie - A piece of information sent by a Web server to a user's browser. (A Web server is the computer that "hosts" a Web site, and responds to requests from a user's browser.) Cookies may include information such as login or registration identification, user preferences, online "shopping cart" information, etc. The browser saves the information, and sends it back to the Web server whenever the browser returns to the Web site. The Web server may use the cookie to customize the display it sends to the user, or it may keep track of the different pages within the site that the user accesses. Browsers may be configured to alert the user when a cookie is being sent, or to refuse to accept cookies. Some sites, however, cannot be accessed unless the browser accepts cookies. (See also "Personally identifiable information")

Cyberspace - Refers to the various information resources that are available through computer networks and the Internet, as well as to "communities" which have developed through their common use of such resources, and to the culture which is developing in such electronically connected communities. May also be used to distinguish the physical world from the digital, or computer-based world.

Data Mining (also see Online Profiling) - The practice of compiling information about Internet users by tracking their motions through Web sites, recording the time they spend there, what links they clink on and other details that the company desires, usually for marketing purposes.

Default - a setting automatically chosen by a program or machine that remains until the user specifies another setting.

Demographic and Socioeconomic Data - Data about an individual's characteristics -- such as gender, age, and income.

Directories - Indexes of Web sites, organized by subject

Disclosure - Refers to companies' practice of making your personal information available to third parties, e.g., marketing lists, other organizations that provide similar services, etc.

Discussion group - Online area, like an electronic bulletin board, where users can read and add or "post" comments about a specific topic. Users can find discussion groups, also referred to as "discussion boards," for almost any topic. (See also "Newsgroups")

Domain name - Domain names are the alphabetic names used to refer to computers on the Internet. A Web site address, including a suffix such as .com, .org, .gov, or .edu. The suffix indicates what type of organization is hosting the site.

com - Originally stood for "commercial," to indicate a site that could be used for private, commercial purposes, but now the best well known top level domain, and used for a wide variety of sites
net - Originally intended for site related to the Internet itself, but now used for a wide variety of sites
edu - Use for educational institutions like universities
org - Originally intended for non-commercial "organizations," but organizations now used for a wide variety of sites
gov - Used for US Government sites
mil - Used for US Military sites
int - Used by "International" sites, usually NATO sites (See also "URL")

Downgraded Cookies - A persistent cookie that is discarded when the session ends or at the expiration time, whichever is first.

Download - to transfer (copy) files from one computer to another. "Download" can also mean viewing a Web site, or material on a Web server, with a Web browser. (See also "Upload")

Downstream Data Use - Refers to companies' practice of disclosing personal information collected from users to other parties "downstream to facilitate a transaction. For example, a content provider may disclose your personal information to a shipping company that will deliver the order to your house. The content provider may also disclose your personal information to a billing or credit card company in order to charge you for the transaction.

DSL (Digital Subscriber Line) - A means of accessing the Internet at very high speed using standard phone lines.

E-mail (Electronic Mail) - Messages sent through an electronic (computer) network to specific groups or individuals. Though e-mail is generally text, users can attach files that include graphics, sound, and video. E-mailing requires a modem to connect the telephone line to the computer, and an e-mail address. E-mail addresses include the @ symbol, such as president@whitehouse.gov.

Email Header - Information that identifies the sender and recipient of a message, information about how the message was routed through the network, the date and time at which the message was sent, and the subject of the message.

Encryption - A means of making data unreadable to everyone except the recipient of a message. Encryption is often used to make the transmission of credit card numbers secure for those who are shopping on the Internet.

Ethernet - The most common technology for connecting computers together in a network.
End user licensing agreement - This refers to the information to which the computer user is referred in the context of downloading software. The "end user" is the person for whom software is ultimately designed.

Executable file - A file that is in a format the computer can directly execute, as opposed to source files, which are created by and for the user. Executable files are essential to running your computer, but can also do it harm. Spyware programs often include executable files that can operate without your knowledge.

Fair Information Practices - Privacy guidelines enumerated in the 1973 report released by the U.S. Department of Health, Education, and Welfare. The principles, which include (1) Notice, (2) Choice, (3) Access, and (4) Security, have been developed and recognized by agencies in the US, Canada, and Europe.

False negative - When spam is not identified and is allowed into your inbox.

False positive - When email is marked as spam even though it is not.

FAQ (Frequently Asked Questions) - Pages which list and answer the questions most often asked about a Web site, newsgroup, etc. The FAQ page often provides useful information for a new user of a Web site, mailing list, discussion group, or product.

File Sharing - Accessing files on one computer from a different computer

Filtered ISP - An Internet Service Provider (ISP) that sets criteria for determining content which is inappropriate for children, and automatically blocks subscriber access to that content. Parents and other caregivers who are choosing a filtered ISP should review the company's criteria for blocking, and make sure those criteria reflect their own values and judgments.

Filtering software - Software that screens information on the Internet and classifies its content. Some filtering software allows the user to block access to certain kinds of content. (See also "Blocking software," "Client-based filtering software," and "Server-based filtering software")

Financial Information (also see Purchase Information) - Information about an individual's finances, including account status and activity information such as account balance, payment or overdraft history, and information about an individual's purchase or use of financial instruments including credit or debit card information.Note: Purchase Information alone does not constitute Financial Information.

Firewall - Hardware or software that secures computer files by blocking unauthorized access. Many computers already have them, but they must be activated by the user.

First Party Cookies - Cookies that are placed on the user's computer by the host domain of the Web site the user is visiting.

Flaming - Posting or sending a deliberately confrontational message via newsgroup, e-mail, etc., usually in response to a previous message.

FTP - (File Transfer Protocol) - A way of transferring files over the Internet from one computer to another.

Gateway - A computer system for exchanging information across incompatible networks by translating between two dissimilar protocols. May also describe any mechanism that gives access to another, such as an ISP which acts as a gateway to the Internet.

Hacker - Someone who breaks into your computer (or into a network of computers) over the Internet.

Hardware - The mechanical devices that comprise a computer system, such as the central processing unit, monitor, keyboard, and mouse, as well as other equipment like printers and speakers.

Health Information - Personal data, which may be collected by a site or a service provider, about an individual's physical or mental health, sexual orientation, use or inquiry into health care services or products, and purchase of health care services or products.

Hidden dialers - Programs that are often unwittingly downloaded that will use your computer to silently dial expensive phone calls which show up on your phone bill.

Home page - The first page on a Web site, which introduces the site and provides the means of navigation.

HTML(Hypertext Markup Language) - The coded format language used for creating hypertext documents on the World Wide Web and controlling how Web pages appear.

HTTP (Hypertext Transfer Protocol) - The standard language that computers connected to the World Wide Web use to communicate with each other.

Hyperlink - An image or portion of text on a Web page that is linked to another Web page, either on the same site or in another Web site. Clicking on the link will take the user to another Web page, or to another place on the same page. Words or phrases which serve as links are underlined, or appear in a different color, or both. Images that serve as links have a border around them, or they change the cursor to a little hand as it passes over them. (See also "Links")

ICANN - The Internet Corporation for Assigned Names and Numbers, the non-profit international organization responsible for domain names management.

ICRA - (Internet Content Rating Association) - An international, independent, non-profit organization which administers a rating system to identify potentially objectionable material included in rated Web sites. (See also "RSACi")

Individual Profiling - Refers to a site's or a service provider's use of personal data to create or build a record on the particular individual or computer for the purpose of compiling habits or personally identifiable information of that individual or computer. For example, online stores may recommend products based on the visitor's purchasing history on the specific Web site or online in general.

IM or Instant Message - IM (Instant Message) - Technology similar to that of chat rooms, which notifies a user when a friend is online, allowing them to "converse" by exchanging text messages. (See also "Web-based instant messaging")

Individual Profiling - Refers to a site's or service provider's use of personal data to create or build a record on the particular individual or computer for the purpose of compiling habits or personally identifiable information of that individual or computer. For example, online stores my recommend products based on the visitor's purchasing history on the specific Web site or online in general.

Interactive Data - Data actively generated from or reflecting explicit interactions with a service provider through its site -- such as queries to a search engine or logs of account activity.
Internet - A global connection of computer networks, also referred to as the "Net," which share a common addressing scheme. (See also "World Wide Web")

Intranet - A private network inside a company or organization, which uses software like that used on the Internet, but is for internal use only, and is not accessible to the public. Companies use Intranets to manage projects, provide employee information, distribute data and information, etc.

IP (Internet Protocol) - The computer language that allows computer programs to communicate over the Internet.

IP Address (or IP number) - A set of four numbers, each between zero and 255, separated by periods (eg: 192.168.0.5). The IP address uniquely identifies a computer or other hardware device (such as a printer) on the Internet.

IRC (Internet Relay Chat) - A protocol and a program type that allows participants to "chat" online in a live forum that usually centers around a common interest. IRC is the earliest form of online chat.
ISDN - (Integrated Services Digital Network) - Digital telephony scheme that allows a user to connect to the Internet over standard phone lines at speeds higher than a 56K modem allows.

ISP (Internet Service Provider) - A company that sells direct access to the Internet, most often through dialing a local phone number. Unlike some online services, ISPs provide little or no proprietary content or online services.

Java -A computer programming language invented by Sun Microsystems. Using Java, Web developers create small programs called "applets" that allow Web pages to include animations, calculators, scrolling text, sound effects and games. (See also "Applet")

Keystroke logger - Hardware device or a software program that records each keystroke made on a particular computer. Marketed as a way for parents to monitor their children's activities on a computer, keystroke loggers are sometimes downloaded unwittingly by users. The keystroke logger then records the keystrokes and periodically uploads the information over the internet.

Keyword - A word that is entered into the search form or search "window" of an Internet search engine to search the Web for pages or sites about or including the keyword and information related to it.

Kids' Web Sites - Web sites designed for children under 13 years old, or which attract visitors who are under 13.

LAN - Local Area Network - A network of connected computers that are generally located near each other, such as in an office or company.

Leashed Cookies - Cookies sent only on requests for first party content. When requests for third party content is made, these cookies are suppressed.

Link - A word, phrase, or image highlighted in a hypertext document to act as a navigation aid to related information. Links may be indicated with an underline, a color contrast, or a border.

Location Data - Information that can be used to identify an individual's current physical location and track him/her as the location changes.

Limitation Collection - The established principle that collection of personal data should be limited to information that is necessary to complete a transaction. For instance, an online service provider that requires you to provide a copy of your tax returns as a condition of becoming a subscriber obviously collects more information than it requires to process a membership. When " personally identifiable information" is not necessary to support the initial activity, users should have the opportunity to restrict or deny its collection.

Machine Access Code (MAC address) - Every computer is identified by a unique number called a Machine Access Code (MAC) address.

Mailing list - An E-mail-based discussion forum dedicated to a topic of interest. An interested Internet user can subscribe to a mailing list by sending an e-mail message that contains appropriate instructions to a specific e-mail address. The computer that houses the mailing list program maintains a list of subscribers and routes all posted messages to subscribers' electronic mailboxes. Mailing lists are either publicly and privately maintained, and can either be moderated or unmoderated.

Modem - A hardware device that allows computers to communicate with each other by transmitting signals over telephone lines, enabling what is called "dial-up access." Modems come in different speeds. The higher the speed, the faster the data are transmitted. The fastest widely available modems are "56K" (or 56 kilobits per second).

Monitoring software - Software products that allow a parent or caregiver to monitor or track the Web sites or e-mail messages that a child visits or reads, without necessarily blocking access.

Mouse - A palm-size device attached to a computer by a cord, which allows the user to select items displayed on the screen by controlling the cursor, and to give commands by clicking the device's buttons. (See also "Hardware")

Multimedia - Information presented in more than one format, such as text, audio, video, graphics, and images.

Multiple, tagged email address - These tools will provide you with new email addresses to use when you are asked to provide an email address on the Web. Mail from these email addresses will be forwarded to your account, but the sender will not know your true email address. You can turn off the duplicate email addresses if you begin to receive spam at one of them. Also, the email addresses are "tagged" so you will know which companies are sending you spam or selling your email address.

Navigation - A system of hypertext paths set up on a Web page to enable visitors to find their way around the site.

Navigation and Click-stream Data - Refers to user data passively generated by browsing the Internet. Includes information regarding the links on which a user clicks, pages a user visits and the amount of time spent on each page

.
Netiquette - The informal rules of Internet courtesy, enforced exclusively by other Internet users.

Netizens - Citizens of cyberspace. (See also "Cyberspace")

Newsgroups - Discussion groups on the Internet (not on the Web, which is only one area of the Internet). Newsgroups are classified by subject matter and do not necessarily deal with journalism or "news." Health, hobbies, celebrities, and cultural events are the subjects of many newsgroups. Participants in a newsgroup conduct discussions by posting messages for others to read, and responding to the messages posted by others.

Notice - Refers to data collector's disclosure of their information practices prior to collecting personal information from consumers.

OECD Guidelines - Privacy Guidelines issued in late 1980 by the Organization for Economic Cooperation and Development. Albeit broad, the OECD guidelines set up important standards for future governmental privacy rules; the guidelines underpin most current international agreements, national laws, and self-regulatory policies.

One-Time Tailoring - Refers to a site's or a service provider's use of personal data to tailor or modify content or design of the site not affirmatively selected by the particular individual, where the information is used only for a single visit to the site and not used for any kind of future customization. For example, an online store may suggest items a visitor may wish to purchase based on the products that she has already placed in her shopping basket.

Online Contact Information (also see Physical Contact Information) - Information that allows an individual to be contacted or located on the Internet, such as the e-mail address. Often, this information is independent of the specific computer used to access the network.

Online Profiling (also see Individual Profiling and Data Mining) - The practice of aggregating information about consumers' preferences and interests, gathered primarily by tracking their online movements and actions, with the purpose of creating targeted advertisement using the resulting profiles.

Online Privacy Alliance (OPA) - A group of more than 80 global corporations and associations that was created to lead and support industry self-regulatory initiatives to protect privacy.

Open Proxies - Many people share their Broadband Internet connection with multiple PDS with some form of proxy software. Some proxy software activates on both network interfaces which means that the proxy will be usable from a customer's internal network and from the Internet facing connection. An Open Proxy will allow a third party to not only exploit a system to send unsolicited email but can also be used for newsgroup postings, chat sessions and in some cases anonymous web browsing.

Open Relays - In open relaying, a mail server allows any other computer to send email through it. Open relaying has been exploited by individuals and companies in order to send unsolicited email.

Operating System - The main program that runs on a computer. An operating system allows other software to run and prevents unauthorized users from accessing the system. Major operating system include UNIX, Windows, MacOS, and Linux.

Operator - The person who is responsible for maintaining and running a Web site.

Opt-in - A policy for giving permission under which the user explicitly permits the Web site operator to either collect the information, use it in a specified manner and/or share it with others when such use or disclosure to third parties is unrelated to the purpose for which the information was collected. (See also "opt-out")

Opt-out - A policy under which the user's permission is implied unless the user explicitly requests that his/her information not be collected, used and/or shared when such use or disclosure to third parties is unrelated to the purpose for which the information was collected. (See also "opt-in")

Peer-to-peer - Any network in which all the computers are of equal capacities and capabilities, as opposed to a client-server network, in which one machine is intended to serve the needs of others. File-sharing networks are generally constructed with a peer-to-peer (also known as P2P) architecture.

Persistent Cookies - Cookies that are discarded when they reach their defined expiration time.
Personally identifiable information - Information that can identify an individual user, such as name, home address, or e-mail address.

Personally Identifiable Transactional Data - Information that describes your online activities such as the Web sites that you have visited, addresses to which you have sent email, files that you have downloaded, and other information revealed in the normal course of using the Internet. Transactional data differs from the content of a communication since it is not the actual substance of your communication, but rather the information about your communication. Personal user preferences tracked by a Web site via a online cookies are also considered personally identifiable when linked to other personally identifiable information provided by online users.

Phishing - An identity theft scam in which criminals send out spam that imitates the look and language of legitimate correspondence from e-commerce sites. The fake messages generally link to Web sites which are similarly faked to look like the sites of the respected companies. On the sites, you are directed to enter your personal information for authentication or confirmation purposes. The information, when submitted, however, goes to the thieves, not to the "spoofed" company.

Physical Contact Information (versus Online Contact Information) - Information that allows an individual to be contacted or located in the physical world -- such as a telephone number or an address.

Platform for Privacy Preferences Project (P3P) - A set of software-writing guidelines developed by the World Wide Web Consortium (W3C), the standard-setting body for the Web. P3P is designed to provide Internet users with a clear understanding of how personal information will be used by a particular Web site, empowering users to avoid sites that do not meet their privacy preferences.

PICS - (Platform for Internet Content Selection) - Technology that allows Web browsers to read content ratings of Web sites. Content ratings are administered by the Internet Content Rating Association (ICRA), an independent, non-profit organization. (See also "ICRA" and "RSACi")

Plug-in - A small piece of software that enriches a larger piece of software by adding features or functions. Plug-ins enable browsers to play audio and video.

Political Information - User information, which may be collected by a site or a service provider, regarding membership in or affiliation with groups such as religious organizations, trade unions, professional associations, political parties, etc.

Pop-up ads (or pop-ups) - Term for unsolicited advertising that appears as its own browser window.

Posting - Sending a message to a discussion group or other public message area on the Internet. The message itself is called a "post."

Preference Data - Data, which may be collected by a site or a service provider, about an individual's likes and dislikes -- such as favorite color or musical tastes.

Privacy Policy - The policy under which the company or organization operating a Web site handles the personal information collected about visitors to the site. Many Web site operators publish their privacy policy on their Web site. The policy usually includes a description of the personal information which is collected by the site, how the information will be used, with whom it will be shared, and whether the visitors have the option to exercise control over how their information will be used. All TRUSTe Web site licensees are required to post privacy statements. (See also "Opt-in," "Opt-out," and "TRUSTe")

Pseudonymity (also see Anonymity) - The identity of the sender (identity meaning the user's real email address or other identifying information such as IP address data) is not known to the recipient but is known to the tool company --and the recipient may be able to reply to the message.
Pseudonymous Profiling - Refers to a site's or a service provider's use of personal data to create or build a record of a particular individual or computer that is tied to a pseudonymous identifier, without tying personally-identifiable information (such as name, address, phone number, email address, or IP address) to the record. This profile is usually used to determine the habits, interests, or other characteristics of individuals while it is not used to attempt to identify specific individuals.

Public Forums - Refers to digital entities such as bulletin boards, public directories, or commercial CD-ROM directories, where personal user data may be distributed by a site or a service provider.

Purchase Information - Information actively generated by the purchase of a product or service, including information about the method of payment.

RSACi - (Recreational Software Advisory Council on the Internet) - Rating system managed by ICRA (Internet Content Rating Association) to provide consumers with information about the level of sex, nudity, violence, offensive language (vulgar or hate-motivated) in Web sites. Ratings provided by RSACi are recognized by PICS technology. (See also "ICRA" and "PICS")

Repository - A mechanism for storing user information under the control of the user agent.
Search engine -A tool that enables users to locate information on the World Wide Web. Search engines use keywords entered by users to find Web sites which contain the information sought. Some search engines are specifically designed to find Web sites intended for children.
Secondary Use - Refers to using personal information collected for one purpose for a second, unrelated purpose.

Secure Socket Layer (SSL) - A secure socket layer is a protocol used to transmit sensitive data securely via the Internet. SSL uses a two key encryption system to secure data, a public key and a private key known only by the recipient of the message. Many Web sites use SSL when collecting information for transactions, generally these URLs will begin with https: instead of http:.

Server - A special computer connected to a network that provides (serves up) data. A Web server transmits Web pages over the Internet when it receives a Web browser's request for a page. A server can also be called a host or node.

Server-based filter - Software which is installed on a host server, such as a Web server, to filter out Web pages which include content which meets specific criteria. Users who connect to a server which uses a filter will only be able to access those pages which get through the server's filter.

Service Set Identifier (SSID) - A service set identifier is used to name a wireless local area network (WLAN). SSIDs are case sensitive text strings in a sequence of letters and numbers, no more than 32 characters long.

Session Cookies - Cookies that do not have a specific expiration time and are discarded when Internet Explorer 6.0 is closed.

Software - A computer program, which provides the instructions which enable the computer hardware to work. System software, such as Windows or MacOS, operate the machine itself, and applications software, such as spreadsheet or word processing programs, provide specific functionality.

Spam - Unsolicited "junk" e-mail sent to large numbers of people to promote products or services. Sexually explicit unsolicited e-mail is called "porn spam." Also refers to inappropriate promotional or commercial postings to discussion groups or bulletin boards.

Spider - A software program that "crawls" the Web, searching and indexing Web pages to create a database that can be easily searched by a search engine.

Subscription Data - Subscription data is the information that you provide to an online service when you sign up to become a member. Subscription data usually includes your name, physical address, email address, billing information, and telephone numbers.

Surf - To search for information on the Web in a random, non-linear way.
System tray - The part of the task bar in Windows, usually on the bottom right of the screen, that shows programs that are running such as antivirus programs or print jobs.

TCP/IP - (Transmission Control Protocol / Internet Protocol) - The protocols, or conventions, that computers use to communicate over the Internet.

Third Party Cookies - Cookies placed on the user's computer by any domain other than the host of the Web site the user is visiting. Third party cookies could be used for a variety of functions, including graphics, charts or tables, articles, or advertising on the Web page the users are visiting.

Time limiting software - Software that allows users to set time limits for access to the Internet, computer games, or other software programs.

Trojans - Programs designed to allow third parties unauthorized access to the computer systems they infect. Trojans may also be used in order to exploit a computer system to send unsolicited email.

TRUSTe - An online seal program. Web sites which display the seal have agreed to abide with certain principles regarding user privacy. A user can access the site's privacy policy by clicking on the seal.

Trustmark - An online seal awarded by TRUSTe to Web sites that agree to post privacy statements which describe their policies toward user privacy, and to adhere to procedures that enforce their compliance with the published privacy policy. A user can access the privacy statement by clicking on the TRUSTe trustmark.

Uninstall - The process of removing a program from a computer. Some applications must be removed with an uninstall program, which removes all files that were installed with the program and restores any modifications made to system files.Unique email address - An address that is hard for spammers to guess, but easy for you to remember. For example, using both letters and numbers in your email address may make it difficult for spammers to guess your email address.

Unique Identifiers - Non-financial identifiers issued for purposes of consistently identifying the individual. These include government-issued identifiers such as a Social Security Number, as well as identifiers issued by a Web site or service.

Upload - Copying or sending files or data from one computer to another. A Web developer, for example, could upload a document to a Web server. (See also "Download")

URL - (Uniform Resource Locator) - The World Wide Web address of a site on the Internet. The URL for the Internal Revenue Service, for example, is http://www.irs.gov. (See also "Domain name")

Virtual Private Network (VPN) - A network that uses public wires, such as the Internet, to connect to nodes and transport data. A VPN uses encryption and other security mechanisms to ensure that there is no unauthorized access to the network and no possibility of interception of data.

Virus - A program that is loaded onto your computer unbeknownst to you. Viruses can make copies of themselves, quickly using up all available memory. Some viruses can transmit themselves across networks.

Web - The World Wide Web. An Internet system to distribute graphical, hyper-linked information, based on the hypertext transfer protocol (HTTP). The World Wide Web is also known as WWW or W3. The Web is not synonymous with the Internet; rather, it is just one service on the Internet. Other services on the Internet include Internet Relay Chat and Newsgroups. The Web is accessed through use of a browser.

Web-based chat - Chat rooms that are found in Web sites, which allow people to chat with each other using their browsers. Another kind of chat room, Internet Relay Chat (IRC), requires additional software. (See also "Chat room," and "IRC")

Web-based e-mail - A technology that allows users to send and receive e-mail using only a browser, rather than using an e-mail program such as Eudora.

Web-based instant-messaging - Instant-messaging technology that works in Web sites, as opposed to that provided by commercial online services. (See also "Instant messaging")

Web site - A collection of "pages" or files linked together and available on the World Wide Web. Web sites are provided by companies, organizations and individuals.

Webmaster - The person responsible for administering a Web site.

Whitelist - A list of 'good' email addresses or Web sites. Some filters are/can be configured to only accept email or allow access to Web sites from the whitelist. A whitelist can also be used to create exceptions to the rules that filter out "bad" addresses and sites.

Window - Enclosed rectangular space on a computer screen, often used on our site to refer to the browser window for the display of a website.

Worm - A program that reproduces itself over a network, usually performing malicious actions, such as using up the computer's resources and possibly shutting the system down.

WWW - The World Wide Web. (See also "Web")

Recommended Symantec Software

Eagle Business Solutions, Inc. is an Authorized Symantec Affiliate.

Symantec’s Norton brand of consumer security solutions delivers Internet security and problem-solving capabilities to individual users, home offices, and small businesses. The Norton brand of products is a market leader in desktop protection, with integrated products that work seamlessly to protect customers’ computers from virus outbreaks and malicious attacks. Internet Security Solutions help defend home and home office users against viruses, worms, and other security risks. These solutions include spyware, spam, and personal firewall protection for PCs, Macintosh® computers, and mobile devices. System Performance Solutions help users prevent and resolve computer problems. Backup and Recovery Solutions provide consumers with tools to undo computer malfunctions and safeguard their important data. Remote PC Solutions allow users to manage remote computers securely.

For more information: Recommended Symantec Software

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