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May 01, 2010

REMINDER REGARDING IRS’ RECORD RETENTION GUIDELINES

Guest Author: M. Pilar Puerto, Esq., Columbus, Ohio

 

Code Section 6001 of the Internal Revenue Code and its regulations provides for most of the IRS’ rules regarding record retention. The IRS recognizes that records include not only paper files, but also computerized data.  And, during these times of ever changing technology, the IRS has issued revenue procedures that businesses must follow in keeping certain computerized data. A business’s failure to comply with these guidelines can result in penalties being assessed and can be detrimental to businesses during an audit. 

 

Revenue Procedure 98-25 provides that Code Section 6001 requirements, which apply to hard-copy books and records, also apply to machine-sensible books and records maintained within an Automatic Data Processing (ADP) system. And, Revenue Procedure 98-25 sets forth the Service’s expectations regarding these items. The ADP consists of an accounting or financial system that processes the taxpayer’s transactions, records, or data. Machine sensible data is data in an electronic format intended for use by a computer.

 

Revenue Procedure 98-25 provides that taxpayers’ machine sensible records must support and verify the entries made on returns and determine the correct tax liability, and they must reconcile with the taxpayer’s books and records. It also provides that taxpayers may create files solely for the IRS's use. But, the taxpayer must be able to establish the relationship between the files created and the original Data Base Management System (DBMS) records. This Revenue Procedure also provides a procedure for taxpayers to identify machine sensible records that taxpayers believe do not have to be maintained and obtain permission to not maintain them. Revenue Procedure 98-25, however, does not relieve a taxpayer from retaining the hardcopy of the records that are created or received in the ordinary course of business. But, Revenue Procedure 97-22 does allow taxpayers to transfer their hardcopy records or computerized records to an adequate electronic storage media.   It also allows taxpayers to destroy original hard copy books and records and delete original computerized records so long as the Revenue Procedure’s guidelines are followed. Machine sensible records, however, are still required to be maintained. 

 

For more information see the attached Revenue Procedures 98-25 and 97-22.

Download Revenue procedures

 

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yes.
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May 01, 2010

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Supra Shoes Sale

yes.
Thanks for these comments; we're not quite sure what are causing the issue for some of you. Please keep letting us know about these issues so we can narrow down what is causing this problem.
--I am trying to find the price of a book I have located,it is good.

The comments to this entry are closed.

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