It is that time of year again! Time to look at your retention schedule and decide what needs to be organized. It is a love-hate relationship for some. Most organizations have filed taxes for 2020, making this a great time of year to think about whether older accounting records may no longer be subject to any retention requirements.

Everyone knows how important it is to balance your company books, but where do you even start? Start by determining what accounting documents you have and what your record retention requirements are. All businesses are required to keep accounting documents for certain lengths of time. Keeping your accounting records organized can save you time, money, and headaches every tax season.

What Documents Are Considered Accounting Documents?

Accounting documents describe a business’s transactions. Examples include general ledgers, bank statements, invoices, inventories, and receipts. Accounting documents are important for business and operational needs, but they are vital for audits.

U.S. Governmental Agency Accounting Documents.

If you are a U.S. governmental agency, the Internal Revenue Service (IRS) has adopted the General Records Schedules (GRS), which contain disposition instructions for administrative functions common to most offices. The GRS recommends businesses keep “financial transaction records related to procuring goods and services, paying bills, collecting debts, and accounting” and to “destroy six years after final payment or cancellation, but longer retention is authorized if required for business use.” [i]  Regarding an audit, the “IRS can include returns filed within the last three years . . .  If we identify a substantial error, we may add additional years. We usually don’t go back more than the last six years. ^[ii]

Accounting Documents for U.S. Business Entities.

If you are a business operating in the United States, retention requirements will differ depending on which state[s] you operate in. Many U.S. companies adopt the retention requirement found in California’s 18 CCR 19141.6, which states:

Records for any year must be retained for the longer of: the time during which the taxpayer’s franchise or income tax is subject to adjustment but not to exceed eight years from the due date or extended due date of return.

Accounting Documents for International Entities.

If your business has a presence in different countries, you could be looking at longer retention periods for accounting documents. To determine retention requirements among multiple countries, ARMA International has put together the Retention of Accounting Records: A Global Survey of Laws and Regulations, a summary of several countries, and their accounting retention requirements. On average, retention periods for accounting documents range from 3 to 10 years. Some companies increase these retention periods to 11 or 12 years to account for fiscal year requirements on top of the applicable base retention period. You will also want to research whether applicable countries have any archival order laws, as these can further increase accounting record retention periods. For example, Poland, Slovenia, and China have archival order laws that create significantly longer accounting record retention requirements.

Now is the right time of year to go through your business accounting records and dispose of any documents not required for legal, business operational, and practical storage needs. Your business will need to weigh the cost of keeping information that is no longer necessary for business operational needs to prevent potential litigation problems.

Are you unsure of which documents you can dispose of? If so, contact Zasio to assist you in identifying gaps in your retention schedule and answer any accounting record retention questions.

[i] https://www.irs.gov/pub/irs-utl/d12829.pdf

[ii] https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits#:~:text=Generally%2C%20the%20IRS%20can%20include,possible%20after%20they%20are%20filed.

 

Disclaimer: The purpose of this post is to provide general education on Information Governance topics. The statements are informational only and do not constitute legal advice. If you have specific questions regarding the application of the law to your business activities, you should seek the advice of your legal counsel.

For US taxpayers, May 17 (Tax Day) is fast approaching, and the question is often asked – How long should I keep my tax records?

Tax Record Retention Periods by Country

Here is a brief rundown of required or recommended recordkeeping periods for income tax records in the United States and other jurisdictions worldwide.

Country	Retention Period	Special Conditions / Notes
Brazil	5 years	Mirrors the standard tax limitation period.
Canada	6 years	Starts after the end of the tax year to which they relate.
China	10 years	Unless otherwise stipulated in specific laws or regulations.
France	6 to 10 years	Standard period is 6 years, but extends to 10 years for certain transactions.
Germany	6 to 10 years	6 years for business letters and general tax documents; 10 years for accounting records, inventories, and balance sheets.
India	6 years	Starts from the end of the relevant assessment year.
Japan	7 to 10 years	7 years generally for individuals and companies under tax law; 10 years for corporate records required by the Companies Act.
Mexico	5 years	Starts from the date taxes were filed or due.
United Kingdom	22 months to 6 years	22 months from the end of the tax year for individuals; 5 years from January 31 following the tax year for self-employed/partnerships; 6 years from the end of the accounting period for companies.
United States	3 to 7 years	General IRS suggestion starts at 3 years, fluctuating up to 7 years (or indefinitely) depending on fraud, substantial errors, or specific credit circumstances.

These time periods do not account for business needs, industry practice, or other legal requirements or exceptions applying to various tax-related records that could potentially increase the required time to keep such records.

United States Tax Record Retention Period:

As we have previously discussed, the general IRS-suggested records retention period for US citizens starts at three years, and fluctuates to up to seven years (and in some cases, indefinitely), depending on various circumstances and limitation periods.

Source

Canada Tax Record Retention Period:

Keep supporting tax documents for six years after the end of the tax year to which they relate.

Source

Mexico Tax Record Retention Period:

Keep tax and accounting records five years from the date taxes were filed or due.

Source

United Kingdom Tax Record Retention Period:

Individuals (not carrying on a business): keep records for 22 months from the end of the tax year to which the records relate.

Self-employed or in a partnership: keep records for at least five years from 31 January following the tax year to which the return relates.

Companies: typically, accounting records must be kept for six years from the end of the accounting period.

Source

Japan Tax Record Retention Period:

Individuals (Under the Income Tax Act): generally need to keep tax records for seven years, but some documents may be stored for five years. Companies also will need to store tax and accounting records for seven years, but the Companies Act requires records to be kept for ten years, regardless of tax law requirements.

Source

Brazil Tax Record Retention Period:

Tax records are to be kept for a general period of five years, which mirrors the standard tax limitation period.

Source

Germany Tax Record Retention Period:

Generally, taxpayers need to keep accounting and tax-related records for six years (trade or business letters sent or received, other relevant tax-related documents) or ten years (accounting records, inventories, annual financial statements, opening balance sheets, etc.).

Source: Fiscal Code of Germany  

India Tax Record Retention Period:

Accounting and tax-related records for people in a variety of professions are to be kept for six years from the end of the relevant assessment year.

Source: Income Tax Rules, Rule 6F 

France Tax Record Retention Period:

Tax records must be kept for six years, with records of certain transactions to be kept for ten years.

Source

China Tax Record Retention Period:

Accounting and tax records need to be kept for ten years, except as otherwise stipulated in other laws or regulations.

Source

It is wise to carefully consider the tax laws, regulations, and recordkeeping requirements in your jurisdiction to make sure you remain legally compliant and prepared for audits or other circumstances requiring access to these records. Proper recordkeeping along with advanced records retention software helps to avoid possible legal, compliance, or other issues down the road.

Contact Zasio today to see how our innovative products and services can meet your recordkeeping and information governance software needs.

 

Disclaimer: The purpose of this post is to provide general education on Information Governance topics. The statements are informational only and do not constitute legal advice. If you have specific questions regarding the application of the law to your business activities, you should seek the advice of your legal counsel.

It’s no surprise that a global pandemic has created a lot of records, along with many questions surrounding these records. As organizations adapt to the new and constantly changing COVID-19 landscape, new processes and record outputs abound. We often get questions from our clients asking “is this a COVID-19 record?” and if yes, “how long should we be keeping this record?” Explicit authorities on company recordkeeping obligations have been slow to trickle down and are a bit of a patchwork with federal and state guidance provided only here and there.

This blog surveys a few of the common recordkeeping questions we’ve received and provides guidance on addressing COVID-19 records within your records retention schedule.

Is a confirmed COVID-19 case recordable?

Answer:  Maybe.

For U.S. Organizations:

The U.S. Occupational Safety and Health Administration (OSHA) has clarified that COVID-19 may be a recordable illness for covered employers if a worker is infected as a result of performing their work-related duties. This seems straightforward enough, but there are various criteria to determine whether the illness is recordable. For COVID-19 to be a recordable illness, the following must be met:

1. The case must be a confirmed case of COVID-19. Per the Centers for Disease Control (CDC), a confirmed COVID-19 case means laboratory confirmation of an individual’s test, with at least one respiratory specimen that has tested positive for SARSCoV-2, the virus that causes COVID-19.[1]
2. The case must be work-related as determined by a work-related analysis which includes a number of questions designed to determine whether the case is likely work-related;[2] This analysis is important since only work-related illnesses must be recorded and reported to OSHA.[3]
3. The instance involves one or more of the general recording criteria including medical treatment beyond first aid or considering the employee’s number of days away from work. OSHA’s definition of a recordable illness includes “both acute and chronic illnesses, such as, but not limited to, a skin disease, respiratory disorder or poisoning.” This definition is limited to abnormal conditions or disorders that exclude the common cold and the seasonal flu.[4]

By OSHA’s own admission, arriving at a work-related determination can be difficult given the ubiquity of community spread.[5] Nonetheless, any recordable COVID-19 illnesses must be retained for a period of 5 years consistent with the OSHA 300 log recordkeeping requirement. Similarly, it would be prudent to keep the work-related analysis for the same period of time in case of an audit.[6]

But what about organizations with international operations?

Organizations with international operations should consult jurisdiction-specific requirements. Research specific to the jurisdictions of your company’s operations is prudent to ensure appropriate retention periods are consulted as well as restrictions on the collection and retention of this class of employee health information. For example, the French CNIL prohibits employers from storing files related to information collected during automated processing of temperature screening of employees. However, CNIL states that the “data protection law does not apply to manual verification of temperatures where no information is retained.”[7]

How long do we need to keep temperature checks of employees taken for building entry purposes?

Answer: Possibly as long as the duration of employment plus 30 years if it meets the definition of a medical record, but a much shorter duration if not.

Employee temperature checks are not usually permitted, but exceptions have been made during the pandemic. Per Equal Employment Opportunity Commission (EEOC) guidelines, employee temperature checks are permitted to determine whether an employee should be excluded from the workplace in the interest of public health.[8] Temperature checks may constitute a medical record,[9] and thus be subject to a 30-year retention period.[10] The definition of an employee medical record under OSHA is very particular:

[A] record concerning the health status of an employee that is made or maintained by a physician, nurse or other healthcare personnel, or technician, including medical and employment questionnaires or histories, the results of medical exams, lab test results, medical opinions/doctor’s recommendations, first aid records, employee medical complaints, and descriptions of treatment or prescriptions.[11]

If this information is collected by an individual that doesn’t meet the above criteria, then it is unclear whether it constitutes a medical record subject to a 30-year retention period.[12]

Privacy Considerations

Determining the appropriate retention period for any COVID-19 related record is important for a number of reasons, including privacy considerations. Given the sensitive nature of health information, employers often minimize the amount of health information they collect. For example, when collecting employee health questionnaires, rather than record an employee’s temperature, employers may record a “yes” or “no” response to the question of whether the temperature meets the threshold for a fever.

Zasio recommends minimizing or even eliminating the amount of personal information an employer collects in proportion to the purpose for which it is collected. If collecting information constituting an employee’s medical record is unnecessary, then collecting a minimal amount of information may be considered more transitory in nature.

Conclusion

The advent of COVID-19 records presents an opportunity for us in the records and information management industry to put our skills to the test. Determining how to categorize these records and assessing the appropriate retention period requires an analysis of a number of factors; it is important to consider the business process(es) associated with the records, the purpose for which the record was created or is needed, business and operational considerations, along with an understanding of the relevant laws and regulations, including privacy. To top it off, organizations grapple with the potential of long-term risks and this certainly plays a part in how COVID-19 related records are being maintained.

For guidance and assistance navigating the complexities of your organization’s COVID-19 related records, please contact Zasio for assistance.

[1] https://www.cdc.gov/coronavirus/2019-ncov/hcp/testing-overview.html

[2] https://www.osha.gov/memos/2020-05-19/revised-enforcement-guidance-recording-cases-coronavirus-disease-2019-covid-19#_ftn4

[3] 29 CFR 1904.4

[4] 29 CFR 1904.7

[5] See Occupational Safety and Health Administration, May 19, 2020 Memorandum for Regional Administrators State Plan Designees, accessed at: https://www.osha.gov/memos/2020-05-19/revised-enforcement-guidance-recording-cases-coronavirus-disease-2019-covid-19

[6] 29 CFR 1904.30

[7] https://www.dataguidance.com/opinion/france-cnil-issues-guidance-employers-personal-data-collection-during-coronavirus-lockdown

[8] https://www.eeoc.gov/laws/guidance/pandemic-preparedness-workplace-and-americans-disabilities-act#q7

[9] 1910.1020(c)(6)

[10] 1910.1020(d)(1)(i)

[11] https://www.osha.gov/sites/default/files/publications/OSHA4045.pdf

[12] Id.

Disclaimer: The purpose of this post is to provide general education on Information Governance topics. The statements are informational only and do not constitute legal advice. If you have specific questions regarding the application of the law to your business activities, you should seek the advice of your legal counsel.

The world is in a race to manufacture and produce a safe vaccine for COVID-19. This has led to an unprecedented pace and volume of clinical trial documentation for the many companies and organizations competing in this race and particular implications for trial participant consent and pharmacovigilance requirements.

In the race for a vaccine, Russia recently unveiled “Operation Sputnik,” approving a vaccine ready for human use and is being administered to essential workers. Russia is the first country to claim it has a working vaccine. China revealed it has approved an experimental vaccine and is administering doses to high-risk professionals and military personnel. The United States announced “Operation Warp Speed,” spending billions on pharmaceutical contracts to manufacture and distribute a COVID-19 vaccine. Several pharmaceutical companies around the world are in the final phases of the vaccine clinical trials.

From preclinical testing to the last phase of clinical studies, it takes years for an experimental drug to be manufactured and produced for human use. The COVID-19 vaccine has been fast-tracked to be manufactured and ready for human use within a matter of months, not years. The expedited development brings up concerns about managing the amount of data gathered for these trials and the speed at which the procedures and documentation are occurring. To demonstrate compliance with Good Clinical Practice standards, every essential aspect of a clinical study must be documented.

The United States Food and Drug Administration produced a guideline in March 2020 (updated in July 2020) outlining procedures for clinical trials during the pandemic. The document refers to Part 312 of section 21 of the Code of Federal Regulations which addresses the records that need to be kept for new pharmaceutical drugs, including regulations for clinical investigators. The 2020 guidance document highlights procedures for obtaining and keeping consent documentation[1]. “When feasible, we recommend a traditional method of obtaining and documenting informed consent using a signed paper copy of the consent form, or use of electronic informed consent”. But what if the written consent by the trial participant is not possible? The USDA guidance document provides two additional methods for consent:

• “Method 1: A photograph of the signed informed consent document can be transmitted to the trial staff. The patient (or an individual in the room) takes a photograph of the signed informed consent document and sends it to the investigator/designee. A trial team member enters the photograph into the trial records along with an attestation that states how that photograph was obtained and that it is a photograph of the informed consent document signed by the patient.”
• “Method 2: A witness can attest to the signature, but a photograph of the signed informed consent document cannot be transmitted. When using a witness, documentation in the trial records includes: (1) a signed and dated attestation by the witness who participated on the call that the patient confirmed their agreement to participate in the trial and signed the informed consent document.

The European Medicines Agency also produced guidance documentation regarding Clinical Trials and procedures[2]. This document also refers to Directive 2001/20 EC Good Clinical Practice for the conduct of clinical trials on medicinal products for human use which addresses record-keeping practices. The guidance document added:

…the following specific aspects should be taken into account with trials involving COVID-19 patients:

• If written consent by the trial participant is not possible (for example because of physical isolation due to COVID-19 infection), consent could be given orally by the trial participant (Art 2(j) of Directive 2001/20/EC) in the presence of an impartial witness. In such cases, the witness is required to sign and date the informed consent form and the investigator is expected to record how the impartial witness was selected.
• In addition, it could be considered that the trial participant and the person obtaining consent sign and date separate informed consent forms. In either case, all relevant records should be archived in the investigator’s site master file. A correctly signed and dated informed consent form should be obtained from the trial participant later, as soon as possible.

What about the pharmacovigilance aspect? Monitoring the safety of medicines is a top priority for pharmaceutical companies. The UK Medicines and Health Regulatory Authority released guidance as to what documents need to be kept for pharmacovigilance inspections since the manner of inspections have changed because of the pandemic.[3] These documents include: “procedural documents (such as SOPs, working instructions, and guides); outputs from pharmacovigilance activities such as safety review meeting minutes; documented product safety reviews; audit risk assessments; agreements in place with partners and service providers”. The 2020 Guide by the USDA touches on pharmacovigilance data they require pharmaceutical companies to keep, “data, which includes the pre-licensure clinical safety database, preclinical data, and available safety information for related vaccines, among other considerations”. There will be extra scrutiny for pharmacovigilance documents as these vaccines are being used globally on a wider scale.

Good Clinical Practice has always set forth very particular and detailed standards for recordkeeping during clinical studies and trials. It is now more important than ever to adapt to regulatory changes. Pharmaceutical companies are receiving, reporting, and creating records on the effectiveness of the vaccine at an accelerated rate. Contact Zasio today to determine whether your company is up to date with the influx of clinical record keeping requirements, pharmacovigilance record keeping, and GDPR requirements.

 

[1] https://www.fda.gov/regulatory-information/search-fda-guidance-documents/fda-guidance-conduct-clinical-trials-medical-products-during-covid-19-public-health-emergency

[2] https://ec.europa.eu/health/sites/health/files/files/eudralex/vol-10/guidanceclinicaltrials_covid19_en.pdf

[3] https://www.gov.uk/guidance/good-pharmacovigilance-practice-gpvp

 

A National Archives Agency preserves official documents, photos, artifacts and records that have important historical value to a country. The purpose of an Archive’s Agency is to preserve these important records for future generations and provide public access to these records.

Why are archive laws so important? Archive laws set out standards for preservation of records and regulations for accurate record-keeping from their creation to disposal or storage.  Archive laws also set mandatory standards for security, storage conditions, protection of records from damage or loss, as well as conditions for storing records in specific mediums.

At first glance, archive law requirements could be understood as being only applicable to governments and their preservation of valuable historical, scientific, social, economic and cultural records.  While most archive laws are focused on government agencies, in some countries, such as the Eastern Block of Europe and China, archive laws can extend record-keeping requirements to include public corporations and non-governmental organizations. Do not be quick to ignore archive laws based on the assumption that they apply only to governments and the retention of historical records. Organizations that are guilty of violating archive law requirements in these countries could potentially bear civil, administrative and criminal liability.

A few areas where an organization could potentially be impacted are as follows:

• Administrative and internal regulations of an organization
• Accounting and payroll
• Tax
• Labor
• Occupational accidents and hazards
• Social security/pensions
• Environmental

Below are examples that include archive law requirements applicable to some types of corporations and non-governmental organizations:

• Russia’s Order of August 25, 2010, N 558 on archival documents encompasses “state bodies, local governments and organizations”, while Russia’s Archival Documents of Scientific, Technical and Production Activities Order is applicable to “archival documents on scientific, scientific-technical, production-technical, design and construction activities of organizations, with an indication of the shelf life applied in various sectors of the economy”.
• China’s National Archives Order 10 applies to “enterprises registered and established within the territory of the People’s Republic of China”.
• Poland’s Dz. U. 1983 No. 38 item 173 Archive Act applies to “entrepreneurs” and “business activity in the field of personal documentation, storage and payroll of employers with a temporary storage period”.
• Latvia’s Archival Law applies to “every institution, as well as to individuals, who have documents with archival value…and natural or legal person exercising an economic activity engaged in an economic activity, or on the basis of a contract of employment, business or author, and other persons as well as an association of person”.

When deciding if an archives law applies to your specific industry, it is helpful to look for an explanation of the law on the country’s main archive website or secondary sources. This can help determine the applicability to your specific industry.

It is important to note that countries are updating their archive laws to reflect changing privacy and data protection legislation. Changes to archive laws aim to correct gaps in definitions, transferring of records within a country and cross-border transferring requirements, location requirements, conditions and disposal of records. For example, Poland’s Data Protection Law repealed a fifty-year retention requirement applicable to employers from its Archive Act. Although the retention was repealed from the Archive Act, it can still be found in other employment laws. Because governments are continuously evaluating and strengthening privacy and data protection, there is potential for further repeal of archival record requirements.

If you need help interpreting how archival laws impact your business, contact Zasio and speak with our team of in-house experts.

Disclaimer: The purpose of this post is to provide general education on Information Governance topics. The statements are informational only and do not constitute legal advice. If you have specific questions regarding the application of the law to your business activities, you should seek the advice of your legal counsel.