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Caradonna: Dispose of sensitive information correctly during tax season


Tax season is here which means business owners are going through troves of sensitive documents for yearly audits and tax filings. You need to go through this information to ensure you are filing and managing your business correctly. However, an important part of managing these sensitive documents is how you store and destroy them.

A well-run business will securely store important documents for as long as needed and then securely destroy them when the information no longer needs to be maintained. Storing and destroying documents without security in mind will lead to you and your clients’ information being leaked which can lead to increased liability for your company. Here are a few things East Valley business owners should consider when it comes to sensitive information.

Know record retention laws and requirements

If you are storing digital or physical documents for yourself and your clients you should know the record retention requirements for those documents.

Jerry Dilk, the director of business development for secure document record storage company Data Storage Centers, said it is important that businesses know state and federal record retention laws.

“Business owners must know how long they are supposed to hold records and when they are supposed to dispose of them,” Dilk said. “For example, it is a general rule of thumb that you keep three years of tax records in case your company is audited.”

Other information such as HIPPA documents are required to be retained for six years at minimum, Dilk said.

You should know the regulations for document retention because it will help you create a better-organized company that disposes of unnecessary documents and can quickly pull up important ones.

Don’t dispose of sensitive materials yourself

Just because you put a sensitive document in a basic paper shredder or throw a hard drive in the trash does not mean the information has been properly disposed of. Sensitive information can still be exposed in shredded documents or a disposed hard drive. Even smashing your hard drive with a hammer before you throw it away does not mean your information is safe.

When it comes time to dispose of you and your client’s sensitive information hire a professional. Secure document destruction is an art and requires an understanding that even the smallest piece of exposed data can leave you at risk. The document destruction company you hire should have state-of-the-art shredding trucks as well as a proper hard drive shredder. Hard drives that go through a shredder completely destroy them so the only thing that can be salvaged are tiny precious metals for recycling. The shredder should be able to destroy both hard drives and SSDs.

Most importantly whatever company you hire should be licensed by the National Association for Information Destruction. NAID AAA certification is a must to ensure the team you hired has the training to securely dispose of any important information.

NAID-certified companies are required to go through independent audits of their data-destruction policy to ensure they are disposing of sensitive materials properly.

If a secure document-shredding company can’t be bothered to get properly certified then they are not the company you should trust with you and your client’s information.

Track access to sensitive information

Properly retaining documents is not just putting them in a filing cabinet and forgetting about them. All important documents should be stored in a secure room, according to Dilk.

“Important information should be stored in a climate-controlled room that most people do not have access to,” Dilk said. “You should have systems in place that monitor what documents are in the room, when they were stored when they were removed and who entered the room.”

Dilk went on to say that creating a controlled access plan establishes a clear chain of command in your security plan and establishes a history of access that you can monitor if important documents are missing or stolen.

The current tax season means essential and sensitive information is top of mind right now. Learning how to properly store and destroy essential documents puts your company at a decreased risk of liability and helps streamline the auditing and tax filing process. Create a security plan that keeps you and your client’s information secure and your company will benefit.

Joe Caradonna is the owner of ProShred Arizona, 624 S. Perry Lane Suite No. 102 in Tempe, a secure document shredding service that helps businesses safeguard their private information.

opinion, letters