Discussion:TAXPREPARER RECORDKEEPING REQUIREMENTS
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Discussion Forum Index --> Business Growth Community --> TAXPREPARER RECORDKEEPING REQUIREMENTS
| 1 March 2008 | |
| As a tax-preparer, it is clear to me that under the Circular 230 rules and ERO requirements that I must minimally retain paper copies of all my client's W-2, W-2G, and 1099-R forms, and also a paper copy of the signed 8879 Forms. I am also aware that I must maintain paper or accessible electronic copies of the completed returns and the acknowledgment files.
What I am unclear about is how much, if any, electronic or paper information I need to retain to provide detailed support of the various line item deductions supporting the Schedules A,B,C,D & E, etc. For example 1098's, 1099-G's, interest statements, charitable contributions, union dues, business mileage records, etc.? | |
Landon5784 (talk|edits) said: | 1 March 2008 |
| I make copies of all | |
| 1 March 2008 | |
| Myth: The tax preparation company must keep a copy of every tax return it has prepared in each of the past three years.
Fact under Regulation 1.6107-1(b) The preparer is required to keep a completed copy of the return OR retain a record, by list, card file, or otherwise of the name, taxpayer ID #, and taxable year of the taxpayer (or nontaxable entity) for whom the return or claim for refund ws prepared and the type of returns or claim for refund prepared. Additionally, the tax preparation firm must keep a record of the name of the individual preparer required to sign the return, and make the records available, on request, to the district director for 3 years after completion of the open period of assessment. Electronic or paperless formats were speicifically allowed. So sayeth an Ethics seminar I went to. So, that's the minimum it seems, otherwise, it's up to you. | |
RoyDaleOne (talk|edits) said: | 1 March 2008 |
| "Paper copies", can you not scan the Forms and keep the scanned files? | |
Death&Taxes (talk|edits) said: | 1 March 2008 |
| Better be able to scan; that is what we have been doing since we bought the new scanner. We do retain a copy of the return; wife wants to make two-sided copies but I hate those. | |
| 1 March 2008 | |
| Electronic or paperless formats were specifically allowed. So, the completed copy of the return could be in that format, e.g. a scan. | |
RoyDaleOne (talk|edits) said: | 1 March 2008 |
| I just print to pdf. | |
Death&Taxes (talk|edits) said: | 1 March 2008 |
| If I must look something up later, I find it easier to open the software file and find the page I want in the forms menu than scrolling through pages and pages of pdf documents. We use the scanner for source documents. | |
Taxstudent (talk|edits) said: | 2 March 2008 |
| Maintaining copies has always been driven more by what your state laws, your level of customer service, and your insurance carrier require than by what Titles 26 or 31 require. | |
| 2 March 2008 | |
| Good points TS. I keep far more than the Reg. above requires, but my practice is small, and I can do it. I can understand how some of the larger practices have a true "document management" problem. | |
Taxstudent (talk|edits) said: | 2 March 2008 |
| As far as the Code is concerned, there isn't a requirement to keep a copy of anything, just a list of names and TINs for the returns you've prepared. On the other hand, your state accountancy (or other applicable) laws may require you to maintain copies of returns and supporting documents, though I can't recall anything specific. Most record retention requirements are driven by customer service and malpractice issues, which generally would vary depending on how the discovery rule works in your state. | |
Taxstudent (talk|edits) said: | 2 March 2008 |
| I should add that I did not consider the ERO requirements since I never have to deal with them. Once the Service extends ERO to non-signing preparers, I'll probably bother to look into them. | |
