CHAPTER 3 Cloud Migration and Planning for Retention

James P. Martin and Harry Cendrowski

Data Retention and the Cloud

Businesses maintain books and records so an accounting of business activities may be performed. Whether for an audited financial report, a compilation, a review, a tax return, or a specific management report, businesses must gather, summarize, and analyze facts and figures to support reports, tax returns, and conclusions. After the report is issued and/or the tax return is filed, supporting documentation must be maintained for a prescribed period of time depending on the particular circumstances of the organization. Organizations moving to a cloud computing solution must carefully plan the service level offerings to ensure that they still meet all data retention requirements applicable to their organization; hosting data in a cloud-based product does not change these requirements. Additionally, organizations need to ensure their cloud solution includes capability to process a litigation hold should they become embroiled in litigation.

Likely the most far-reaching requirement for retention is Treasury Regulation 1.6001, which requires taxpayers to retain information to support their tax return information:

Except as provided in paragraph (b) of this section, any person subject to tax under subtitle A of the Code (including a qualified State individual income tax which is treated pursuant to section 6361(a) as if it were imposed by chapter 1 of subtitle A), ...

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