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


The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation.