IRS Circular 230 Disclosure: To ensure compliance with the requirements imposed by the IRS, we inform you that any tax adv...
THE ARMAGEDDON EFFECT
• Significant changes over the past 25 years
– Increased reliance on “paperless” office
• Benefits i...
WHAT IS A DOCUMENT RETENTION PLAN?
Two issues:
1. Should you retain company documents?
2. In what form and for how long sh...
WHAT SHOULD INFORM THESE DECISIONS?
• Legal obligations
– Federal and State statutes and administrative
rulings
• Industry...
LEGAL OBLIGATIONS: TAXING AUTHORITIES
• Business income tax returns
– All supporting documents
– Full corroboration will b...
LEGAL OBLIGATIONS: TAXING AUTHORITIES
• Business asset records
– Proof of ownership and/or sale
– Required to show amortiz...
LEGAL OBLIGATIONS: TAXING AUTHORITIES
• Legal documents
– E.g., bylaws, board of directors minutes, annual
meeting minutes...
LEGAL OBLIGATIONS: TAXING AUTHORITIES
Duration of retention required by tax authorities:
• Depends on the period of limita...
LEGAL OBLIGATIONS: TAXING AUTHORITIES
Duration of retention:
• Employment records
– Four years after date taxes were paid ...
INDUSTRY AND CULTURAL STANDARDS
• Significant variance
– degree to which regulated
• Comparison with other cultures
POTENTIAL RISK OF LITIGATION
• Balance of two considerations
– (1) you need to save documents in order to mount
a defense/...
IN WHAT FORM SHOULD YOU PRESERVE
DOCUMENTS?
Certain documents MUST be preserved in paper form:
• Wills, codicils, and test...
IN WHAT FORM SHOULD YOU PRESERVE
DOCUMENTS?
• Your comfort zone – the extent to which you
want to rely on digital resource...
FOR HOW LONG SHOULD YOU PRESERVE
DOCUMENTS?
• Consider litigation issues
– Best evidence rules/compliance with statutes
• ...
DOCUMENTS MAY BE PRESERVED IN
ELECTRONIC FORM
• Wire transfers and electronic checks
• Bank deposit images
• Tax returns
•...
OTHER “ELECTRONIC VS PAPER” ISSUES
• Electronic signatures
– Legal validity
• Some documents must be notarized/recorded
by...
PERSONAL RECORDS
Categorized by type:
• Income
– Form W2, Form 1099, bank statements, brokerage
statements
• Expenses
– sa...
PERSONAL RECORDS
How Long Should You Save These Documents?
• Generally three years if you owe additional taxes
unless:
– Y...
PERSONAL RECORDS
Mechanics of document retention plan:
• Plan type
• Compliance with the plan
Lisa Chapman has represented startup and mid-sized companies for over twenty years in the
areas of employment counseling, ...
www.rroyselaw.com
PALO ALTO
1717 Embarcadero Road
Palo Alto, CA 94303
LOS ANGELES
11150 Santa Monica Blvd.
Suite 1200
Los ...
Upcoming SlideShare
Loading in...5
×

The Paper Armageddon A Practical Guide For Creating A Document Retention Policy For Your Company

281

Published on

In this age of information overload, companies must make smart decisions about which documents to retain, and when and how to retain them. Lisa Chapman, Esq. of the Royse Law Firm will provide an overview of legal and practical considerations that should inform your documentation policy, with an emphasis on ensuring that your Company is complainant with tax and other relevant laws as well as practical solutions for handling what is now being called the "information overload."

Published in: Law, Technology, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
281
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Transcript of "The Paper Armageddon A Practical Guide For Creating A Document Retention Policy For Your Company"

  1. 1. IRS Circular 230 Disclosure: To ensure compliance with the requirements imposed by the IRS, we inform you that any tax advice contained in this communication, including any attachment to this communication, is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to any other person any transaction or matter addressed herein. Lisa Chapman, Esq. The Royse Law Firm, PC lchapman@rroyselaw.com April 23, 2014 THE PAPER ARMAGEDDON: A PRACTICAL GUIDE FOR CREATING A DOCUMENT RETENTION POLICY FOR YOUR COMPANY
  2. 2. THE ARMAGEDDON EFFECT • Significant changes over the past 25 years – Increased reliance on “paperless” office • Benefits include efficiency and ease of use • Impact of social media • Environmental effects
  3. 3. WHAT IS A DOCUMENT RETENTION PLAN? Two issues: 1. Should you retain company documents? 2. In what form and for how long should you retain company documents?
  4. 4. WHAT SHOULD INFORM THESE DECISIONS? • Legal obligations – Federal and State statutes and administrative rulings • Industry and cultural standards • Potential risk of litigation and legal compliance requirements • Comfort zone - the extent to which a company is comfortable relying on digital resources to preserve documents
  5. 5. LEGAL OBLIGATIONS: TAXING AUTHORITIES • Business income tax returns – All supporting documents – Full corroboration will be required for an audit • Employment tax records – E.g., employer identification number, amounts and dates of wages, annuity or pension payments, tax payments, personal identification information about employees, tip allocations, inclusive dates of employment, and job titles
  6. 6. LEGAL OBLIGATIONS: TAXING AUTHORITIES • Business asset records – Proof of ownership and/or sale – Required to show amortization, depreciation, gains, losses, or deductions – Keep original copies of deeds and proof of payment • Business ledgers and other important documents – E.g., journal entries, P & L statements, and financial statements
  7. 7. LEGAL OBLIGATIONS: TAXING AUTHORITIES • Legal documents – E.g., bylaws, board of directors minutes, annual meeting minutes, and business formation documents • Bank account records • Credit card records • Human resources files
  8. 8. LEGAL OBLIGATIONS: TAXING AUTHORITIES Duration of retention required by tax authorities: • Depends on the period of limitations during which you may seek a refund or the taxing authority may conduct an audit – You need these documents if you want to amend your return or if a taxing authority elects to audit your returns • Business income records – Generally three years if you owe additional taxes unless: • You don’t report income and the underreporting is equal to or greater than 25% of your gross income as shown on your tax returns = 6 years • If you don’t file a return or file a fraudulent return = no limit • If you intend to claim a credit or refund = 3 years after taxes paid • If you intend to file a claim for loss of a worthless security = 7 years
  9. 9. LEGAL OBLIGATIONS: TAXING AUTHORITIES Duration of retention: • Employment records – Four years after date taxes were paid or due, whichever is later • Business asset records – The clock begins to run from the date of sale • Legal documents – No limit • Bank account and credit card records – 7 years • Human resources files – Applicants – 3 years – Employees – 7 years from the date of termination or 10 years after worker’s compensation benefits were paid – If it is litigation – 5 years from the date of conclusion
  10. 10. INDUSTRY AND CULTURAL STANDARDS • Significant variance – degree to which regulated • Comparison with other cultures
  11. 11. POTENTIAL RISK OF LITIGATION • Balance of two considerations – (1) you need to save documents in order to mount a defense/pursue a claim, however – (2) you don’t want too many documents retained as it will be very costly to defend a lawsuit • Federal and state laws concerning document retention: – “Litigation Hold” – Production of digital records
  12. 12. IN WHAT FORM SHOULD YOU PRESERVE DOCUMENTS? Certain documents MUST be preserved in paper form: • Wills, codicils, and testamentary trusts • Documents relating to adoption, divorce, and other family law matters • Court orders, notices, and other court documents • Notices of cancellation or termination of utility services • Notices of default, repossession, foreclosure, or eviction • Product recall notices affecting health and safety • Documents relating to the transportation of hazardous materials
  13. 13. IN WHAT FORM SHOULD YOU PRESERVE DOCUMENTS? • Your comfort zone – the extent to which you want to rely on digital resources to preserve documents – Technology meltdown – Hacking – Your workforce population – Your service provider’s requirements
  14. 14. FOR HOW LONG SHOULD YOU PRESERVE DOCUMENTS? • Consider litigation issues – Best evidence rules/compliance with statutes • Legal requirements
  15. 15. DOCUMENTS MAY BE PRESERVED IN ELECTRONIC FORM • Wire transfers and electronic checks • Bank deposit images • Tax returns • Tax receipts • Contracts • Warranties • License agreement • SEC reports • Auto insurance • Business operation documents: marketing materials, collateral • Emails/texts/tweets • Video and photographs • Voicemails • Trademark registrations • Employee handbooks
  16. 16. OTHER “ELECTRONIC VS PAPER” ISSUES • Electronic signatures – Legal validity • Some documents must be notarized/recorded by county recorder – Grant deeds, deeds of trust, mortgages, and leases • Personal documents to save in hardcopy – Passports, drivers license, identification, work place rules, business licenses, and health permits
  17. 17. PERSONAL RECORDS Categorized by type: • Income – Form W2, Form 1099, bank statements, brokerage statements • Expenses – sales slips, invoices, receipts, cancelled checks, or proof of payment • Home – closing statements, purchase and sales invoices, proof of payment, insurance records, Form 2119 (if you sold home before 1998) • Investments – brokerage statements, mutual fund statements, Form(s) 1099, Form 2439
  18. 18. PERSONAL RECORDS How Long Should You Save These Documents? • Generally three years if you owe additional taxes unless: – You don’t report income and the underreporting is equal to or greater than 25% of your gross income as shown on your tax returns = 6 years – If you don’t file a return or file a fraudulent return = no limit – If you intend to claim a credit or refund = 3 years after taxes paid – If you intend to file a claim for loss of a worthless security = 7 years
  19. 19. PERSONAL RECORDS Mechanics of document retention plan: • Plan type • Compliance with the plan
  20. 20. Lisa Chapman has represented startup and mid-sized companies for over twenty years in the areas of employment counseling, employment litigation, commercial litigation and trade secret litigation. In her counseling practice Lisa uses her substantial experience as a trial attorney to counsel companies on employment compliance issues, including wage and hour laws, employment policies, hiring policies, sexual harassment training, leave of absence, and other employment related issues. She regularly counsels companies involved in mergers and acquisitions about due diligence issues relating to employment law. Lisa has litigated a wide variety of commercial and employment related matters in federal and state courts and before the Equal Employment Opportunity Commission, the U.S. Department of Labor, and the California Department of Labor. Among others, she has litigated cases involving sexual harassment, discrimination, and class action wage and hour claims. Lisa puts a priority on achieving successful settlements and resolutions for her clients in a timely and cost effective manner. Telephone: (650) 813 9700 ext. 221 Email: lchapman@rroyselaw.com BIO
  21. 21. www.rroyselaw.com PALO ALTO 1717 Embarcadero Road Palo Alto, CA 94303 LOS ANGELES 11150 Santa Monica Blvd. Suite 1200 Los Angeles, CA 90025 SAN FRANCISCO 135 Main Street 12th Floor San Francisco, CA 94105 Palo Alto Office: 650-813-9700 Contact Us

×