The IRS & Record Preservation

The internal revenue code requires taxpayers to retain for specified periods certain books and records which can be referred to should tax-return data come into question. What exactly should be kept, however, is a mystery to many businesses.

For tax purposes, a good general rule is to retain records that support the tax return schedules until the statute of limitations or any relevant extensions have run their course. Generally, this is years after the filing of a return. Interim trial balances of receivable, payables, and other work documents could be considered for disposal after the annual statements have been completed if they include information that is repetitious (an example of this would be an Accounts Receivable transaction list that includes all transactions for year-to-date each time prepared).

There is also a category of records which should be retained indefinitely as part of the business history.

A general checklist is presented below. All time references that relate to tax information are from the due date of return or granted extensions. Of course, if any litigation is pending, documents related to such should be referred to the proper counsel for guidance. The summary specifically refers to printed documents. When alternate storage media (such as computer backup tapes or other digital storage media) are available, the schedule should be adjusted accordingly. When information is stored on magnetic disks or tapes, written documentation should be retained as to the contents, storage formats, and retrieval methods. The information would be worthless without a method of visual presentation.

Intervault can assist you in developing and implementing your records storage program.

2 years

• General correspondence

3 years

• Purchase orders

• Repair orders and maintenance records, etc.

• Requisitions

• Sales contracts

• Sales invoices, etc.

• Payroll time cards

• Bank statements

4 years

• Insurance policies (after expiration)

• Export declarations

• Freight bills and manifests

• Shipping and receiving reports

5 years

• Payroll Tax Returns

• Annual Inventory Records

• Audit Reports

6 years

• Daily time reports (summaries of payroll cards/records)

• Personnel files (after termination)

• Tax withholding statements

• Expense reports

• Subsidiary ledgers

• Monthly trial balances

• Employee insurance claims

• Insurance accident reports

• Insurance fire inspection reports

• Other inspection reports

8 years

• Payroll and earnings records

• Paid purchase vouchers

• Production records

• Expired mortgages, notes, and leases

10 years

• Insurance claim settlements

• Journals of original entry

Permanently

• Business licenses, etc.

• Important contracts

Florida Intervault is experienced is helping individuals and businesses prepare for the unexpected. Call or visit us today to see how we can help you!

DISCLAIMER

The information contained on this site is not intended as legal advice. Please consult a legal and/or tax professional to resolve any questions or concerns you may have regarding personal or professional financial matters.