IRS Encourages Taxpayers to Safeguard Financial and Tax Records

From IRS.gov.  In May, 2006, the IRS released this statement that discusses scanning your financial records as a way to mitigate potential losses due to hurricanes and other natural disasters.

Take Advantage of Paperless Recordkeeping

Many people receive bank statements and documents by e-mail. This method is an outstanding way to secure financial records. Important tax records such as W-2s, tax returns and other paper documents can be scanned onto an electronic format.

“New technologies provide taxpayers with new opportunities to keep their records secure,” said E. Martin Davidoff, chairman, Tax Liaison Committee, American Association of Attorney-Certified Public Accountants (AAA-CPA). “Many people are now receiving bank statements and documents via e-mail. One approach, using a scanner to fill in the gaps of electronic commerce, is to have all financial records in electronic format. By doing so, one can copy all of their records onto a ‘key’ or ‘jump drive’ periodically. Those keys can be sent to a relative in another city for safe-keeping in case one’s normal computer backup systems are destroyed.”

Other options include copying files onto a CD or DVD. Also, many retail stores sell computer software packages that you can use for recordkeeping.

“Disasters such as hurricanes can’t be prevented,” said Dennis B. Drapkin, chair, American Bar Association (ABA) Section of Taxation. “But the disruption they cause can be reduced. Remember to safeguard and backstop your most important records. Store them in a safe place. Back-up your electronic files. Make duplicates where possible and keep them in a separate location.”

Read the entire IRS News Release here: http://www.irs.gov/newsroom/article/0,,id=157643,00.html