Question:
Can Paper W-9s be Destroyed after Scanning into your Electronic System?
Answer from Marianne Couch, principal COKALA Tax Information Reporting Services:
You can destroy the original paper Forms W-9 if your electronic system and your procedures meet IRS requirements. Field Service Advice 200229011, posted on April 8, 2002 states: “If Taxpayer complies with the provisions of section 7 of Rev. Proc. 97-22, Taxpayer may destroy the original paper Forms W-8 and W-9 after it has:
1. Conducted testing of its electronic storage system establishing that hardcopy records are being reproduced in compliance with all the provisions of Rev. Proc. 97-22; and
2. Instituted procedures that ensure its continued compliance with all the provisions of Rev. Proc. 97-22.”
Rev. Proc. 97-22, Section 7, says, “This revenue procedure permits the destruction of the original hardcopy books and records and the deletion of the original computerized records (other than ‘machine-sensible’ records required to be retained by Rev. Proc. 91-59, 191-2 C.B. 841), after the taxpayer:
1. Has completed its own testing of the electronic storage system that establishes that hardcopy or computerized books and records are being reproduced in compliance with all the provisions of this revenue procedure; and
2. Has instituted procedures that ensure its continued compliance with all the provisions of this revenue procedure.”
Section 4 of Rev. Proc. 97-22 outlines the following requirements:
– You must be able to show the control procedures which maintain the integrity of the W-9 data as it goes into your electronic system and is retained there;
– The retained image must clearly show the information and signature on the form (if it had a signature);
– You must have an indexed retrieval system;
– You must be able to print a hard copy of any W-9 the IRS requests
The IRS has authority to test your system and review your procedures. If you change systems or upgrade, you must put something in place to ensure continued integrity and ability to print a W-9 if requested by the IRS, for documents that were entered into the system prior to the system changes.
