8879's

[oceanlovin'ea]

We are supposed to keep 8879's for 3 years. Is that correct?

So at this point, we should keep 2007,2006,2005. Everything else can be shredded if I am correct.

Just want to make sure. I am cleaning house.

[taxea]

8879's

If you are the taxpayer, yes but, I would recommend you keep all tax returns if you own a house or a business. The IRS can go back 10 years in some cases. It makes filling out job applications easier because it gives you your salary for each employer. taxea

[erchess]

ummmm Taxea

Oceanlovinea is an EA like the two of us. She's interested in the rules for tax professionals keeping the 8879s. I don't know why she didn't ask about keeping copies of returns.

[Gene V]

We are supposed to keep 8879's for 3 years. Is that correct?

So at this point, we should keep 2007,2006,2005. Everything else can be shredded if I am correct.

Just want to make sure. I am cleaning house.

From page 2 of the instruction for 8879

Important Notes for EROs
c Do not send Form 8879 to the IRS unless
requested to do so. Retain the completed Form
8879 for 3 years from the return due date or
IRS received date, whichever is later. Form
8879 may be retained electronically in
accordance with the recordkeeping guidelines
in Rev. Proc. 97-22, which is on page 9 of
Internal Revenue Bulletin 1997-13 at
www.irs.gov/pub/irs-irbs/irb97-13.pdf.

[erchess]

What about returns?

I belong to the school that clients should keep returns really as long as they live but at the very least as long as they own a home or a business or any asset mentioned on the return such as a home with mortgage interest or an asset being depreciated or a business that gave them a K1 etc.

But I have no intent of keeping my clients' returns longer than I legally must. And btw I know that instead of keeping the returns themselves I can pull out certain data and keep that but it's easier to keep the whole return. But when can I shred those returns?

[Gene V]

Record keeping

When my client inquires about how long and what records to keep, I print out Pub. 552 (Recordkeeping for Individuals--the pub is 8 pages) and give them a copy.

[oceanlovin'ea]

Thanks

Thanks for the info. I was just asking about keeping the 8879's. I don't have room to keep what I am not required to keep.

I have my backup disks with client returns on them. I also have paper copies for my clients since I have been doing their returns (about 6 years at the most). But now I am going to go paperless. This past tax season I didn't make a paper copy for me to keep. I'll see how it goes this season. But I have run out of storage space since my office is in my home.

In fact I have a professional organizer coming to my office in a couple of weeks to help me get more organized. She comes highly recommended by another EA in the area. So I am looking forward to knowing where everything is.

[erchess]

If I

knew where everything was in my office my billable hours would drop 20% which I cannot afford.

[taxea]

8879's

In this age of paperless retention it is much easier to retain documents for longer than the required 3 years.
I keep all client docs for 10 years because I know the IRS, in some cases, can go back 10 years. My experience is that clients can never find their prior year copies that I provided to them.
I recommend that the client retain any and all returns if they anticipate having to fill out an extensive work application background form, own a house, own a business, own a rental, have investments or are young enough that they will be changing employers. The returns have a wealth of information that can be used in the future. taxea

[Bees Knees]

I convert all old tax info to PDF and save it forever on my hard drive. I estimate I currently have enough hard drive space to save 766 years worth of data.

[JohnH]

Yeah, that's all well & good, but what are you going to do when the year 2775 rolls around?

[Bees Knees]

Buy a new computer.

[taxea]

8879's

Not a good idea to save on harddrive...if it goes down you will lose it all. Better to put it on a thumb drive or CD/DVD. taxea

[Bees Knees]

I have a system in which my hard drive is backed up onto three different computers in three different locations, plus the original computer and location.

Better than thumb drive or CD.

[ChEAr$]

pro organizer

Thanks for the info. I was just asking about keeping the 8879's. I don't have room to keep what I am not required to keep.

I have my backup disks with client returns on them. I also have paper copies for my clients since I have been doing their returns (about 6 years at the most). But now I am going to go paperless. This past tax season I didn't make a paper copy for me to keep. I'll see how it goes this season. But I have run out of storage space since my office is in my home.

In fact I have a professional organizer coming to my office in a couple of weeks to help me get more organized. She comes highly recommended by another EA in the area. So I am looking forward to knowing where everything is.

Just remember confidentiality of client information while he/she is in your office. Can't have anybody being able to see clients' ssn, dates or birth, etc.