702-871-8678
Record Retention
The IRS required that taxpayers maintain accounts or books of record capable of enabling a reviewer to establish the correct income, deductions, credits or other matters affecting tax or informational returns. No specific recordkeeping requirements are contained in the IRS Code; however, the following guide complied by the American Institute of Certified Public Accountants can help.
Retain Permanently
-Audit reports
-Capital stock and bond records
-Cash books
-Charts of accounts
-Checks – canceled – for important payments i.e., taxes, purchases of property, special contracts, etc. Checks should be filed with the papers pertaining to the underlying transactions
-Unexpired contracts, mortgages, notes, leases, deeds
-Correspondence – legal and important
-Depreciation schedules
-General ledgers and year end trial balances
-Financial statements (year end)
-Insurance records, current accident reports, claims, policies, etc.
-Journals
-Minute books of directors, stockholders, bylaws and charter
-Patents and related papers
-Property appraisals by outside appraisers
-Property records, including costs, depreciation schedules, year end trial balances, blueprints and plans
-Retirement and pension records
-Tax returns and worksheets, revenue agents’ reports, and other documents relating to determination of income tax liabilities
-Trademark registration and copyrights
-Training manuals
-Union agreements
Retain for 7 years
-Accident reports/ claims (settled cases)
-Account payable ledgers and schedules
-Accounts receivable ledgers and schedules
-Checks – canceled
-Expired contracts, mortgages, notes, leases, deeds
-Expense analysis/distribution schedules
-Garnishments
-Inventory listings
-Invoices (to customers, from vendors)
-Notes receivable ledgers and schedules
-Payroll records and summaries
-Personnel files (terminated)
-Petty cash vouchers
-Purchase orders
-Sales records
-Scrap and salvage records
-Stock and bond certificates (canceled)
-Time records/ cards
-Voucher register and schedules
-Vouchers for payment to vendors, employees, etc. — including allowances and reimbursement of employees, officers, etc
-Withholding tax statements
Retain for 3 years
-Employment applications
-Insurance policies (expired)
-Internal audit reports
-Internal reports (miscellaneous)
-Physical inventory tags
-Sales commission reports
Retain for 2 years
-Bank Reconciliation’s
-Correspondence – general or routine
-Duplicate deposit tickets
Retain for 1 year
-Receiving reports
-Requisitions
-Stockroom withdrawal forms
Source: Sattel, Johnson & Appel
