Any exceptions (due to special circumstances related to the files) to the approved retention and destruction policy must be documented. Documents containing confidential or sensitive information should be destroyed using a method that renders them unreadable (such as shredding for physical files). Proper destruction of documents is an important consideration. What are general guidelines regarding destruction and control of client records?Īll clients should be notified in writing regarding the retention and destruction of documents and that they may request copies of any data contained therein subject to firm approval. Tax returns and workpapers (including electronic filing authorizations and any such documentation to support virtual currency transactions) – 7 years Special projects (reports and workpapers) – 7 years Permanent files for former clients – 7 years Permanent files for current clients – Permanent Reports filed with government agencies (including workpapers) – 7 years Regulatory examination files – 7 years after the close of the exam Litigation support projects (including workpapers) – 3 years There is no applicable statute of limitations on assessment because there is no tax return filed to report an employer’s liability. 4980H assessable payments (for applicable large employers) – Permanent. What are general document retention guidelines for client records?Īudits, reviews and compilations (financial statements and workpapers) – 7 yearĭocumentation supporting required health coverage for employees and non-subjection to Sec. Worksheets and related backup documents for firm returns – 7 years Time and billing information (including invoices) – 7 years Shareholder documents, agreements and contracts – Permanent Retirement plan/401(k) plan information – Permanent Personnel files (post-employment) – 7 years after the employment ends Leases and contracts – 7 years after the term Insurance documents and policies – 7 years after the term Records on virtual currency and other digital assets including the transaction history, access and security information for as long as these assets are ownedĪccident reports and claims – 7 years after the accident/settlementĬlient newsletters and other marketing materials – 7 yearsĬonflict of interest disclosures – 7 years after the conflict has expiredĬontinuing Professional Education (CPE) records – 7 yearsĬorporate agreements, annual reports, minutes and bylaws – Permanent Property and equipment records and invoices – 7 years after the disposal Payroll reports (including Forms W-) – 7 years What are guidelines to consider for electronic records?įirms should obtain the necessary counsel to confirm that all applicable federal, state, local and international regulatory requirements are met.Īnnual and monthly financial reports – 7 yearsīank statements and bank reconciliations – 7 years Workpapers used in developing the work products. Original client records should be returned and not retained. Records supporting provided healthcare coverage for employeesĬonclusions and research utilized in analysis.ĭrafts and other documents not utilized shouldn't be retained. Legal records such as contracts, policies, licenses and permits The following are examples of the types of documents to consider when developing a retention policy: What types of documents should be addressed in a document retention policy? A well-crafted and followed policy promotes efficiency, could assist the firm in the defense of a claim and establishes compliance with federal and state laws that dictate retention of documents.įirms may need to consult with their liability insurance provider and/or legal counsel about their document retention policy.Ĭonsider downloading and customizing the AICPA Tax Section’s Document Retention Policy Template for Tax Practitioners. It’s important for all tax practitioners to maintain a written document retention policy. Should firms maintain a written document retention policy? Document retention policies for firm operations and client records Additional guidance is provided to help practitioners advise their clients on taxpayer record retention. This series of frequently asked questions (FAQs) provide guidelines for tax practitioners to consider when preparing a written document retention policy for their firm.
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