Here’s why tax accountants need a shred policy like everyone else.
With just a few weeks left in the tax season, accountants and tax preparers are busy filing yearly returns for their clients. What happens to that paperwork once the season is over, and where are old tax records going once they are no longer needed? Here’s why tax accountants need a shred policy like everyone else.
Shredding Safeguards Information
Accountants and tax preparation services handle some of the most valuable information for individuals, organizations, and businesses. It is imperative that these financial records are properly destroyed in a safe and secure manner once their retention periods have been met.
It’s the Law
- Laws like The Fair and Accurate Credit Transactions Act of 2003 (FACTA) have a provision regarding the “proper disposal of consumer information.” It requires the “shredding, pulverizing, or burning of papers containing consumer information.”
- The Graham-Leach-Bliley Act (GLBA, pronounced “glibba”), states that financial institutions must have a written information security plan. This includes safely shredding and destroying information.
- The Sarbanes-Oxley Act requires that public companies disclose and evaluate their internal controls, and this includes a document retention and destruction policy.
Record Retention Helps Streamline Paperwork
Every tax firm should have a record retention policy and should have legal counsel review it make sure that all legal areas are covered. The policy should spell out what records should be kept and for how long.
Policy Tips to Remember
A record retention policy should cover both physical and digital items. Developing a physical retention policy for your organization requires planning, such as employing the use of alarms and cameras, using an alarm system, and of course using locks on all doors, including locked storage bins for files and other sensitive paperwork.
Any information should be protected against unauthorized personnel or third party affiliates from disclosure, modification, hacking, or theft.
Offices can protect data by implementing a clean desk and clear screen policy to mitigate the risks of unauthorized access beyond working hours.
When it comes to the removal of property, this should include procedures for proper document management authorization, and document destruction.
If it’s time to destroy old client tax records, Legal Shred can come to your place of business to shred on site and shred them. Legal Shred protects our customers by providing secure paper shredding and hard drive destruction under federal and state destruction laws. More than 40 Federal laws mandate that all business, including tax services, protect the confidential information of their clientele and employees.
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