Employers May Now Scan and Shred Forms W-2 by Andrew Lopez

 It’s that time of year again to re-organize your desk, plan your summer vacation and shred your W2’s. Yes, shred your W-2’s.

Internal Revenue Procedure 97-22 authorizes employers to use an “electronic storage system to maintain records that either images their hardcopy (paper) books and records, or transfers their computerized books and records, to an electronic storage media…”

According to the IRS Chief Counsel, as long as the material is scanned, “the revenue procedure permits destruction of the original hardcopy records.” Therefore employers that have scanned their Forms W-2 may shred the originals. However, reasonable controls must be used to ensure integrity of the electronic storage system holding the images, the system must be evaluated regularly, and regular checks must be performed to ensure the data has not been breached.

More importantly, shredding W2’s after they’ve been digitally archived increases data security since unauthorized persons cannot access file drawers containing employees names, addresses, and social security numbers. The American Payroll Association also recommends scanning undeliverable W-2’s, as well as the envelope in which it was returned as proof of mailing. Employers are required to keep tax records for a four year period following the due date of the tax return associated with the scanned form.

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