Keeping bookkeeping records for clients

[oceanlovin'ea]

I know that clients who have a business are required to keep their records as long as the business is operating.

My question is how long as I required to keep my records for my bookkeeping clients? How long for active clients and how long for inactive clients?

Thanks

Linda

[MarkCTX]

I have always heard and used 7 years for record retention whether active or inactive.

Mark

[ChEAr$]

Retention policy

For my accounting clients for whom I maintain journals and ledgers, tax reports, depreciation schedules, etc etc, I will maintain three years here in my files. Then seal them up in a big envelope marked with the year and give back to clients, advising them to maintain for 10 years from that year, IOW, 7 more years. There is no requirement to keep books indefinitely in a business.
According to IRS with whom we're all familiar by now, it's caveat is to keep books and records for as long as materially .. something or another.
relevant?

[mastertaxguy]

IRS Sec. 6695(d) (TTB 15-2) requires us, as a tax preparer for pay, to keep a copy of the return or list of names, ID numbers of taxpayers, for three years (of a return cycle which starts July 1 of each year). There are now specific rules dealing with supporting records/documents for EITC. In the case of self employed indivdiuals, for example, their records of income and expenses (bookkeeping) may have a bearing on EITC eligibilty. For those kind of things, I am keeping them as noted below.

Bookkeeping records? What does your engagement letter say if anything? Hopefully it says the client is responsibile for their own record keeping and you recommend at least 7 years of records be kept.

Every one on this forum will have a different answer, or sometimes two or three answers. Mine is 4 years from July 1 after the date the return was prepared and submitted to IRS electroncially. Record keeping is paperless (things are scanned and/or converted to PDF). I delete things over the summer.

However, other than the EITC issues, I am not aware of taxpayer record retention. Maybe if a CPA.

[oceanlovin'ea]

businesses now closed

Several of these businesses are now closed and have been for several years. Most of the time they gave me copies of their receipts or reports printed out. I don't have originals of anything.

I am running out of storage space for some of these things.

Thanks for the help.

Linda

[geekgirldany]

I keep my bookkeeping/payroll client records for 7 years. I just went through last month and had 6 years worth of info shredded that I've had since I started my business. I also had 15 hard drives destroyed. Trying my best to do everything paperless now.

[taxea]

considering records can now be kept on disk....I keep all records separated by years and also current and non-current clients. For past clients. I keep their records for 10 years as that is the amount of time of the IRS statute of limitations. One never knows when they will come in handy. How many times have you tossed something only to find that you had to purchase a replacement at a future time. And, no, I don't hoard.

[ATSMAN]

In my opinion a tax preparer keeping accounting records for 7 ys, until the statute of limitations run out should be sufficient. I do tell my clients to maintain basis records until the property is disposed plus 7 yrs.