Document Scanning Software Recommendation

[Chowdahead]

I recently discovered that ATX will no longer be supporting or offering Paperless Plus.  I believe they were supposed to offer a cloud-based alternative but I haven't found it on their website yet.  PaperlessPlus was not great and frequently had technical issues for me.  But it integrated well in ATX so that's why I kept using it.

Anyone recommend another software product that I can use to scan customer documentation (i.e. tax forms, IDs, signature forms, etc?).

I really don't wan to return to storing paper after 5 years of being paperless....

[Tax Prep by Deb]

I've been using Fujitsu ScanSnap for several years.  If it died today I would immediately order another one.  It has been one tough scanner.

[Yardley CPA]

I use VueScan and it has worked relatively well for me. 

https://www.hamrick.com/

 

[Lee B]

36 minutes ago, Tax Prep by Deb said:

I've been using Fujitsu ScanSnap for several years.  If it died today I would immediately order another one.  It has been one tough scanner.

Yes, I have a Fujitsu ScanSnap that is still going strong after many years.  Excellent scanner!

[Abby Normal]

1 hour ago, cbslee said:

Yes, I have a Fujitsu ScanSnap that is still going strong after many years.  Excellent scanner!

That's all I buy. We have 3 generations of the top of the line scansnap and I can't recall any of them ever dying.

[Abby Normal]

I've never felt a need for any paperless software. I just scan and (hopefully) save the scan to the correct folder. I also print many things to PDF files in the client folder, like emails, text files, spreadsheets, photos of docs, etc.

[Medlin Software, Dennis]

I am sure I have brought this up before, but how do you comply with https://www.irs.gov/businesses/automated-records, or if you are not subject, what allows you to go paperless and still maintain compliance?  I have NOT reread all the rules, but the last time I did, I could not find a way any reasonable person would elect to have only e records.  I know, the odds of a review are slim, but I suspect those with certification, degrees, or other things causing them to have to meet extra standards, could be in a bad position if they knowing or unknowingly are not meeting the e records rules (such as no E&O to cover the expense of lost data).

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(1) The District Director may conduct a records evaluation at any time the District Director deems it appropriate to review the taxpayer's record retention practices, including the taxpayer's relevant data processing and accounting systems.

1) The District Director may periodically initiate tests to establish the authenticity, readability, completeness, and integrity of a taxpayer's machine-sensible records retained in conformity with this revenue procedure.

 

 

[Catherine]

We have an old ScanSnap (~8yrs) still going strong. Office bought a 2nd a couple years ago for throughput ease and it's also going strong.

I have, at my home office, a truly ancient (12+ years?) Kodak i1120 ScanMate - still going strong - that has a nearly vertical paper path and the best duplex scanning ever. No longer available or supported but it's been so good I bought a 2nd off eBay a couple years ago.

[Abby Normal]

16 hours ago, Medlin Software, Dennis said:

how do you comply with https://www.irs.gov/businesses/automated-records

That's from 1998. I'd say it's long past time for an update. The procedure doesn't even mention PDF files, only 'machine sensible records.'

[Medlin Software, Dennis]

2 hours ago, Abby Normal said:

That's from 1998. I'd say it's long past time for an update. The procedure doesn't even mention PDF files, only 'machine sensible records.'

One part is from '97.  What gets me is how anyone would agree to this, because of the requirement to proactively notify if there is any chance data is not available (such as even a computer change, or upgrading software - and not taking the item to recreate every required item), and the essentially giving rights to a search at any time for ANY reason (what those on parole must give up!) .  Imagine one of these (random, or not so random) searches during your busy time and your computer(s) are either occupied, or more likely, taken away for search.  I know, they state is is not a "search", but items found during any allowed examination are not likely to be prohibited from being evidence.  Imagine having to explain that to your clients, E&O provider, your BOP provider, and your debtors.

Personally, I don't consider PDF's to be a specific issue, unless the PDF readers ever abandon an old format.  But, I have multiple local backups and multiple secure online backups, so anything where I could not get to something would have far worse consequences than a data review.  But, the eltter of the rulings, even PDF's are considered e records, so the onerous allowance of not keeping paper records still applies.

Paper - while I have not ruin across it, if there is no corresponding rule for paper, then paper remains king.  A file cabinet or drawer by year, labeled with the first allowable shred date remains a safe way to comply, and to not retain any data which (being not required) could be used against you/client).

I guess for me, a "sum it up" for the original topic, I would not be comfortable using some sort of data retention service UNLESS they warranted they meet the IRS data retention rules.

[mcbreck]

My scanner is just my brother printer.

I use NAPS2 as the software. It's free and tiny in size so it doesn't bog down the computer. Years ago I was using an older laptop which was hanging when tax software was open, Quickbooks and using dialup so I shifted a lot of programs to something tiny. I remember I had Paperless and it just brought everything to a standstill when I loaded it so a change had to be made on my end.

[Lion EA]

From IRS Pub 1345:

Record Keeping and Documentation Requirements

EROs must retain the following material/documents listed below until the end of the calendar year at the business address from which it originated the return or at a location that allows the ERO to readily access the material as it must be available at the time of IRS request. An ERO may retain the required records at the business address of the Responsible Official or at a location that allows the Responsible Official to readily access the material during any period of time the office is closed, as it must be available at the time of IRS request through the end of the calendar year.

• A copy of Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, and supporting documents that are not included in the electronic records submitted to the IRS;
• Copies of Forms W-2, W-2G and 1099-R;
• A copy of signed IRS e-file consent to disclosure forms;
• A complete copy of the electronic portion of the return that can be readily and accurately converted into an electronic transmission that the IRS can process; and
• The acknowledgement file for IRS accepted returns.

Forms 8878 and 8879 must be available to the IRS in the same manner described above for three years from the due date of the return or the IRS received date, whichever is later. The Submission ID must be associated with Form 8878 and 8879:

• The Submission ID can be added to the Form 8878 and 8879 or
• the acknowledgment containing the Submission ID can be associated with Forms 8878 and 8879. Forms 8878 and 8879 must be available to the IRS for three years from the due date of the return or the IRS received date, whichever is later.

If the acknowledgement is used to identify the Submission ID, the acknowledgement must be kept in accordance with published retention requirements for Forms 8878 and 8879. The acknowledgement is not required to be physically attached to Form 8878 and 8879; it can be electronically stored.

EROs may electronically image and store all paper records they are required to retain for IRS e-file. This includes Forms 8453 and paper copies of Forms W-2, W-2G and 1099 R as well as any supporting documents not included in the electronic record and Forms 8878 and 8879. The storage system must satisfy the requirements of Revenue Procedure 97-22, 1997-1 C.C. 652, Retention of Books and Records. In brief, the electronic storage system must ensure an accurate and complete transfer of the hard copy to the electronic storage media. The ERO must be able to reproduce all records with a high degree of legibility and readability (including the taxpayers’ signatures) when displayed on a video terminal and when reproduced in hard copy.

[Medlin Software, Dennis]

Lion.  Thank you for the above.  It appears nothing has changed since I dug into it heavily a decade or two ago.  If the references, like the one above, included all of the relevant information (I shared above), I doubt anyone would stop keeping paper. I did not (then) find any issues where something like a fire, theft, or accidental loss required anything of the keeper of paper records as far as proactive notification of loss.

I say all of this as I am on the lookout for a good looking enough (SWMBO vetoed metal) tall 4 drawer file cabinet for my office/grandaughter room...  4 years is my data cycle.  Current is in a drawer next to me, the 4 prior are in the dedicated cabinet.  The drawers get labeled for shred date, then the empty one is used for the data no longer current.

[Lion EA]

I think we have specific steps to take in the case of theft, physical or electronic. We have newer IRS projects, such as Security Six and WISP. We need to document our own record retention policies, as allowed, and follow them. https://www.irs.gov/pub/irs-pdf/p5708.pdf

[Medlin Software, Dennis]

8 minutes ago, Lion EA said:

I think we have specific steps to take in the case of theft, physical or electronic. We have newer IRS projects, such as Security Six and WISP. We need to document our own record retention policies, as allowed, and follow them. https://www.irs.gov/pub/irs-pdf/p5708.pdf

Does WISP supersede 97-22 (and the like)?  The ones where e record POTENTIAL or actual loss requires notification to the IRS? (Potential is the issue as it can easily be argued a computer change means there is potential for data loss, so a letter to the IRS is mandated. Same for a power outage. This is, unless the holder checks all required data, one by one, after a computer move or power loss.)  How about the requirement to agree to "inspection" at any time?  (The one no one should ever agree to IMO!)

That is what I am always hoping to hear, that 97-22 (etc.) has been updated/replaced by something less onerous.  My suspicion is there is no reason for the IRS to make the rule less impactful, so they haven't.

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While maybe not for tax data, there are localities (Local PTB) who have delved into data retention, such as requiring data to be kept under the liable person's control, and IIRC, WITHIN their jurisdiction (no commercial online backup likely would meet this).

[Lion EA]

The IRS notes at the bottom of notices if they've been replaced by a later notice or if this is replacing an earlier notice. Otherwise, the IRS just keeps piling on regulations for us tax preparers to follow.

Remember that some documentation actually belongs to the IRS; we're just the IRS's filing cabinets. So, the IRS has the legal ability to drop in unannounced to view certain things, such as Forms 8879.

[Medlin Software, Dennis]

1 minute ago, Lion EA said:

The IRS notes at the bottom of notices if they've been replaced by a later notice or if this is replacing an earlier notice. Otherwise, the IRS just keeps piling on regulations for us tax preparers to follow.

Remember that some documentation actually belongs to the IRS; we're just the IRS's filing cabinets. So, the IRS has the legal ability to drop in unannounced to view certain things, such as Forms 8879.

Filing cabinets and first line enforcers... That is the "rub" of my part of this thread, many are doing things which put them, and the clients, at risk, via the e records rules.

I have some awful first hand experience in this area, as I have shared before.  Person had my software on their computer.  (Convicted tax fraudster, preparing returns for others and taking fake refunds for them.)  Feds searched/inspected the computers, found my software, and asked what part I had in the situation.  The convicted party, while they could, made death threats against me and mine if I even spoke to the officials investigating.

I think I already asked here, and most clients do not ask things about how secure their data is kept (IIRC, it was a topic which should now be for anyone not using at least Windows 10).  I ask those questions (now).

[Jerry W]

I use Epson ES-580W for scanning. I use Paperport Pro 14.7 and Pdf X-change Editor for managing the files.

[Lee B]

On 1/10/2023 at 11:13 AM, Lion EA said:

The IRS notes at the bottom of notices if they've been replaced by a later notice or if this is replacing an earlier notice. Otherwise, the IRS just keeps piling on regulations for us tax preparers to follow.

Remember that some documentation actually belongs to the IRS; we're just the IRS's filing cabinets. So, the IRS has the legal ability to drop in unannounced to view certain things, such as Forms 8879.

In 30 years I only have personal knowledge of the IRS visiting a client unannounced once, about ten years ago.

My client kept making their federal payroll tax deposits very late.

It was kind of surprising since they only had 3 or 4 part time employees.

According to my client, the IRS Agent didn't actually do much except to ask some payroll related questions which as I remember they didn't answer truthfully.

This was a client who I fired.

[Lee B]

Amusing discussion, since the IRS still hasn't implemented optical scanning and all paper filed 1099s have to be entered by an employee.

[Medlin Software, Dennis]

Just now, cbslee said:

Amusing discussion, since the IRS still hasn't implemented optical scanning and all paper filed 1099s have to be entered by an employee.

If true (I have no idea at all) makes what some old timers told me seem real.  The IRS has some, in decision power, who know they are leaving for private, and realize keeping things complicated benefits them.  I am still a bit surprised the paper 1099's are now multi year, but it may have been done in tie in with the supposed upcoming easy efile portal, despite what forms suppliers and paid portals likely lobbied against.

[cpabsd]

I too use the Fujitsu for scanning.  I choose to use File Center for my storage capabilities.  It has some great integrations with my portal that make it even more efficient.  I could use Windows to save, but found File Center worth the money for the time saving features.