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Tax Tips are not a substitute for legal, accounting, tax, investment or other professional advice. Always consult with your trusted accounting advisor before acting upon any Tax Tip.
That's the Way the Cookies Crumble
A lot has been said and written in recent years about computer "cookies." Much of it is misleading or confusing. In actuality, the ramifications of cookie technology can be positive, negative or neutral.
Cookies are either temporary (sometimes called "session" cookies) or permanent ("persistent"). It is important to know the difference.
*Temporary cookies are stored in your Internet browser's memory, but they are deleted once you finish your browsing session. In contrast, permanent cookies reside on the computer's hard drive. They remain there unless you delete them. Even if you delete these cookies, they will be re-created if you visit the same Web site.
When you visit a Web site, the information you submit--for example, an order form--is retained as you move from page to page. If this did not occur, you would have to make the same or similar entries over and over again as you navigated through the Web site.
With a temporary cookie, a small amount of browser memory is set aside to retain the required information. But then you must reenter the same information the next time you visit the Web site.
*A permanent cookie enables the Web site to recognize you by transferring a text file with a unique ID tag to your computer's hard drive. The browser automatically presents the cookie whenever you visit the site.
This can benefit you in a myriad of ways. For instance, the cookies (either temporary or permanent) can trigger automatic logons, preserve preferences and save items to a "shopping cart," just to name a few of the possible uses. Most cookies are not harmful.
However, cookies are also used to create profiles of consumers, essentially without asking their permission. The cookie tracks the Web sites where you have surfed, what pages were viewed, how long you stayed there and whether you returned. If you provide personal data, it may be stored with the unique ID tag.
Eventually, your profile could be passed to others for marketing purposes and possibly devious means. Sophisticated programs enable others to sort the information provided by computer cookies, categorizing targets in areas such as gender, race, age, income, political and religious affiliations, physical location, marital status and so on. Thus, the profile is available for all the world to see.
In one of the worst forms, cookies from one Web site might track your visits to a different Web site. For example, most of the ads that you see on Web sites do not actually come from the site that you are viewing, but from sites that provide ads to other sites. When the advertising site displays the ad, it can place cookies on your computer. This lets the advertising company track your Web surfing habits over a range of sites to build a profile.
Due to recent technological advances, cookie controls allow you to turn off cookies or use lists for exceptions. For example, you might turn off the cookies from a suspect site and maintain them for another when you think the purpose is useful.
Cookie contents are encrypted, so they can be distinguished only by the site that placed them. This enables you to maximize the positive aspects of cookies while minimizing the negative ones.
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TAX ADVICE DISCLAIMER: In accordance with IRS Circular 230, any tax advice included in this communication, including attachments, is not intended or written to be used, and cannot be used by you or any other person or entity, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions, nor may any such advice be used to promote, market or recommend to another party any transaction or matter addressed within this communication. If you would like such advice, please contact us.
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