Last tax season alone, 19 million tax-related documents containing social security numbers, addresses, etc. were printed and mailed to the IRS. While the world is focused on cyber threats, one of the biggest threats to businesses may be where business leaders never thought to look: the trash can.
The Paperless Office Is a Failed Prediction
We may think we’re living in a paperless world, but the paper-free office may have been a failed prediction. In fact, a recent Stack-and-Shred survey shows that 89 percent of businesses are still using paper copies for record keeping. This tax season, businesses are printing documents like every year before, and those records may be putting business information at risk.
Two-thirds of employees believe shredding is important according to the same survey. However, 24 percent of employees admit to throwing sensitive business information away without first shredding it. So, as businesses are investing trillions in IT security, educating employees on best practices for shredding documents could save your business from catastrophe.
Follow IRS Guidelines to Protect Your Business
Tax professionals agree that following record-keeping guidelines established by the IRS and properly disposing of old tax records will help protect your business. “It’s a good practice to regularly inventory records and documents you have on hand and make an assessment of what you need to keep and for how long,” says Julia A. Turk, tax attorney and principal at Chicago-based law firm Much Shelist. “Storing unnecessary financial documents or other sensitive records raises the stakes in the event of a data breach. If you don’t need it, don’t keep it.”
This tax season, the IRS has compiled a list of the documents that your business needs to keep (in a secure location), and highlighted what documents can be shredded after the period of limitation runs out to protect private business information. The IRS has established the following small business guidelines for keeping tax information:
- You owe additional tax and situations (2), (3), and (4), below, do not apply to you; keep records for 3 years.
- You do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years.
- You file a fraudulent return; keep records indefinitely.
- You do not file a return; keep records indefinitely.
- You file a claim for credit or refund* after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.
- You file a claim for a loss from worthless securities or bad debt deduction; keep records for 7 years.
- Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
One-third of employees don’t shred documents because it’s too time consuming. However, Swingline’s Stack-and-ShredTM shredders have auto-feed technology that boasts a 98 percent time savings over traditional shredders. After you’ve identified the documents you no longer need to keep, Stack-and-Shred shredders allow you to quickly and safely destroy sensitive information. Simply place a stack of old tax documents in the shredder, close the lid, and walk away.
This tax season, create a work environment where employees and leadership are trained on proper security protocols and have the proper resources to destroy documents: it could save your business.
This guest post is courtesy of Adam Smith.