Business owners may struggle to handle Federal Tax Information (FTI), unaware of the consequences of non-compliance. Any mishandling or mishaps in using, storing, transmitting, or disposing of FTI may result in penalties. It’s imperative to comply with all the requirements of IRS-1075 to be on the safe side.
IRS-1075 is a set of rules guiding businesses using FTI data. This publication features all the information on safeguards, controls, policies, and practices that companies must follow to protect FTI data’s confidentiality. How do you promote IRS compliance in your business?
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Secure & Accurate Records
Establishing an accurate and secure record-keeping system is one way to ensure IRS compliance in your business. Have a plan that incorporates all the FTI records and any other data or document associated with them. It must also include information about access rights to the FTI data.
Access Control
To comply with the Internal Revenue Service (IRS) provisions, you must restrict access to only authorized personnel access to the FTI data. If you’re storing the information digitally, you have to follow restricted access protocols, such as data labeling. These precautions are designed to protect not only your financial data, but your clients’ as well.
Properly Trained Employees
Training of workers in charge of handling, securing, storing, transporting, and disposal of FTI data is essential. You need to ensure they receive annual certifications for the data security training. Finally, you should also carry out annual inspections to ensure you’re implementing proper methods throughout the FTI data’s lifetime. An improperly trained employee is a potential, if unknowing, backdoor for data thieves.
Reporting Data
The IRS Publication 1075 requires you to send periodic FTI data reports to a designated IRS point of contact for internal reviews. Such reports include the SPR (Safeguard Procedures Report) and SAR (Safeguard Activity Report). These information reporting requirements detail the purposes for disclosures made for congressional oversights. Your report to the IRS must be comprehensive, accurate, and securely transmitted.
IRS Compliance Requirements
IRS rules are detailed, restrictive, and often quite complex. But regardless of how difficult proper research can be, failing to properly comply can cost your business significantly in both fines and lost reputation. Take the time to evaluate your current record system and double-check that you’re following all IRS business requirements.
Contact us to learn more about IRS compliance for businesses.
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