Securing important documents during tax season

Tax season is in full swing, and that means business owners are shifting through piles of sensitive documents for yearly audits and tax filings. This information is essential in ensuring you don’t get a visit from the IRS, but it is essential that you dispose of these documents correctly when you are done with them. These documents contain private personal and financial information about you, your employees, your business, and your clients, so you must store and destroy them with information security in mind.
A good business securely stores important documents for as long as it needs them and properly destroys that information when they are no longer required to hold onto it. Improperly storing and disposing of documents will put your and your client's information at risk and increase liability for your company. Here are a few tips to ensure you are disposing of tax documents with security in mind.

Understand record retention laws and requirements

Storing digital and physical documents for you and your clients requires knowing the record retention requirements for those documents.
Jerry Dilk, Director of Business Development for document storage company Data Storage Centers, said it is essential for Phoenix business owners to know State and federal record retention laws.
“You are required by law to hold certain records and dispose of them properly,” Dilk said. “For example, you should keep four years of tax records in case you are audited.”
Other information, such as HIPPA documents, must be retained for at least six years.
Knowing the regulations for document retention will help your company stay organized by disposing of non-essential documents quickly and making the essential documents easy to find.

Never dump documents yourself

Properly shredding sensitive documents requires more than putting them through a basic shredder or throwing old hard drives in the dumpster. Sensitive information will be exposed if records are not appropriately shredded or hard drives are not completely destroyed. You can’t just smash your hard drive with a hammer and expect your information to be inaccessible and safe from prying eyes.
Hire a professional to dispose of your documents and electronic data. Secure document destruction is a learned skill, and it requires understanding that even the smallest piece of exposed data can put you and your clients at risk. The paper shredding company you hire should have a state-of-the-art shredding truck, and they should dispose of sensitive information on-site.
They should also have a proper hard-drive shredder that wraps and demolishes your electronics down to recycle precious metals. The shredder should be able to destroy hard drives and SSDs.
Most importantly, the paper shredding company you hire should be licensed by the National Association of Information Destruction. NAID AAA certification is non-negotiable to ensure the team has the training and oversight to dispose of sensitive tax documents securely. NAID AAA-certified paper shredders are audited yearly, so if they are still certified, it means they are maintaining those standards.
If a company is not certified, do not trust them with you or your client's sensitive information.

Monitor access

Properly retaining documents is more than just putting them in a filing cabinet and forgetting about them.
Important documents should be in a secure room, Dilk said.
“Important documents must be stored in a climate-controlled room that only a select few employees have access to,” Dilk said. “Create systems that monitor what documents are in the room, where they are stored, when they were removed, and who entered the room.”
Dilk said that creating a controlled access plan establishes a transparent chain of command in your document security plan and creates a history of access that you can review if essential documents are ever missing or stolen.

Tax season means companies frequently deal with sensitive information. Learning how to store and destroy sensitive documents during tax season properly will put your company at a decreased liability risk and streamline your auditing and tax filing process.