Shredding worries.

[JG EA]

I am removing and shredding returns from the office that are dated 2003 and older for people that are no longer clients. I am also shredding their W-2’s that I kept for efile purposes.

So I need reassurance. It is just fine to do so isn’t it?

[Gretel]

Yesterday, I was wondering about the same question. In the back of my mind is a memory that retention policies for files need to be communicated to clients.

For my current clients I will include this in my engagement letter but I am unsure about former clients when I never communicated anything to them.

Hope someone has a good answer and thanks for posting this question, JG.

[sea-tax]

I am removing and shredding returns from the office that are dated 2003 and older for people that are no longer clients. I am also shredding their W-2’s that I kept for efile purposes.

So I need reassurance. It is just fine to do so isn’t it?

I don't think this would be a problem if that is your stated policy. I think it would be prudent to at least notify clients once a year with your privacy statement that you have this policy.

Unfortunately I do not have any source to back up this opinion.

I personally started last year to go paperless and have now scanned any all docs in the client files, even those who I have not seen in 3 or 4 years. After scanning I have a shred-it company come to my office and destroy all paper work on site, as an employee watches.
They come every couple weeks and it seems to be well worth the money.

I have noticed that occasionally those clients that I have not seen in a couple of years somehow come back like the prodigal son and have not filed since. In those cases it is nice to have the old records.

[Luis Mopeo]

IRC section 6106(b):

"Any person who is an income tax return preparer with respect to a return or claim for refund shall for the period ending 3 years after the close of the return period - (1) retain a completed copy of such return or claim, or retain, on a list, the name and taxpayer identification number of the taxpayer for whom such return or claim was prepared..."

The return period is the 12-month period ending July 1 of each year.

Electronic records satisfy the record retention requirement.