Discussion:Paper, Paperless, Etc.

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Discussion Forum Index --> Business Growth Community --> Paper, Paperless, Etc.


Lrichards (talk|edits) said:

19 February 2014
For years I kept a hard copy of the tax return and all supporting data in file. So much paper accumulated I had to send files out to a commercial shredder when stale. Then, a couple of years ago I just started keeping a copy of the tax return in file, and let my clients no I would no longer be a file service for them. No one objected. Today, starting for 2013, all I intend to keep in file are basis data, copies of signed authorizations for those who choose to file on paper, and the like. No more tax return copies or other supporting data will be retained. Does anyone see any problem with this? Am I missing anything I am required to do? Of course I do have an electronic copy going back several years of tax returns on computer, and there is also a cloud backup.

Tax Writer (talk|edits) said:

19 February 2014
I stopped keeping paper copies of anything years ago. I have a local backup of everything (tax returns and other client records), as well as a cloud backup using Carbonite. Everything is scanned to PDF and shredded. It makes everything a lot easier, and more organized. No more lost files. If a client needs a tax return, I offer them a free PDF via email, or I can print and mail one to them for a fee. I haven't had anyone choose the "paper copy" in a long time.

Interestingly, though, I still file several client's returns on paper, especially if there's nominee income. That information doesn't get transmitted with the efile and I hate getting mid-year notices, which I always do in those cases. I also never recommend Direct Deposit of refunds; in the last five years, TWICE, either the bank or the IRS has incorrectly deposited a taxpayer's refund check, and guess who has to deal with the fallout? In one case, the bank made an error and the refund went into another person's account, and that other person promptly spent it. It took 9 months to iron out and we lost the client. If they ask for direct deposit, I put in the numbers, but the client has to verify the direct deposit info and also initial that the numbers are correct.

Okay, back to work.

Kathyt (talk|edits) said:

19 February 2014
I think we are required to keep copies of W-2's and other documents that have w/h on it; if not I'm pretty sure we used to be. I think it would be unwise not to keep workpapers to show where I got the figures to put on the tax return. Have you thought about just going paperless? I use Lacerte (Intuit)'s DMS program, we scan in all the workpapers and so there is no need to keep the paper.

Lrichards (talk|edits) said:

19 February 2014
Hmm, I better rethink this. I'll check out the DMS Program.

Smokeytax (talk|edits) said:

19 February 2014
Taxwriter - I'm glad you have reached the same conclusion I have on direct deposit of refunds but sorry about what you went through getting there. I don't recommend it and will do it only if requested by the client plus I have a copy of a check to refer to for the routing info plus I instruct the client to verify the direct deposit numbers on the return.

BUT - we're finding some states will only send refunds via debit card - what a pain in the neck - so we're rethinking the issue for those states, especially if the refund is very small.

Tax Writer (talk|edits) said:

19 February 2014
I think it would be unwise not to keep workpapers to show where I got the figures to put on the tax return.

Of course-- I wasn't clear enough I guess. I scan all of this. All the workpapers and the taxpayer's docs. I don't keep a paper copy of anything.

Bottom Line (talk|edits) said:

20 February 2014
I've scanned everything for several years. I use FileCabinet from Thomson Reuters.

I get a voided check every year and scan it into FileCabinet. I enter the numbers and have the client or my assistant verify the numbers. We have too many problems with mail to trust refund checks. At least once a month I or a client have a problem with lost or missing mail. Just today I had a package returned as no such address when a letter sent two days later was delivered with no problem.

CathysTaxes (talk|edits) said:

20 February 2014
I scan everything and create a PDF version of the return. The 'file cabinet' gets backed up on Carbonite.

Gazoo (talk|edits) said:

20 February 2014
I did a double take when I read this about scanning work papers.... you folks must be insane. One misplaced comma or idle word (especially if the IRS agent has a personality profile like our friend and member "SC") could send you both to the penetentiary. No indeed, I won't scan such papers for the same reason I won't keep a diary. I told my wife years ago that if she wanted any evidence against me, she'd have to pay a detective to get it.

Gazoo (talk|edits) said:

22 February 2014
I don't know how I forgot to mention this, but if you want your work papers or any other papers kept private, then keep them in a good, old fashion file cabinet which has been refurbished by a professional. The new file cabinets are not sturdy enough to offer you any protection. Yes, I know that by tradition, the Service does not ask for work papers BUT I had a government agent (it doesn't matter which agency) tell me this year that they don't really need subpoenas anymore, anyway. The NSA scoops up all the stuff from computers in this country whether your computer is connected to the net or not, and once it finds a tax preparer, all the preparers files are delivered to the IRS's doorstep. Let this serve as a caution for all concerned.

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