Record Keeping

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General Record-Keeping Requirements

Taxpayers must keep records that adequately reflect their income. No specific form of records is ordinarily required, but specific requirements must be met for electronic storage systems when automatic data processing is used for record keeping or when records are kept on microfiche or microfilm. Certain records are prescribed for taxpayers claiming refunds, for exempt organizations, and for taxpayers having tip income or gambling income.

  • Taxpayers must keep books and records accurately reflecting items from which the taxpayer's taxable income may be determined, such as gross income, deductions, inventories and credits.

  • An electronic storage system may be used to maintain books and records.

  • Taxpayers may keep tax records by automatic data processing or computer.

  • Taxpayers may keep micrographic reproductions of books and records provided they are readable and accessible.

  • Taxpayers claiming a refund, credit or abatement must supply a complete and detailed record supporting the claim.

  • Exempt organizations must keep books and records of unrelated business income.

  • Additional record keeping is required for public charities, private foundations and other tax-exempt organizations, REITs and REMICs subject to excise taxes.

In addition, record-keeping requirements apply to the following organizations:

  • executors filing estate returns,

  • donors of gifts,

  • employers responsible for wage withholding,

  • employers liable for FICA and FUTA taxes, and

  • persons subject to the tax on greenmail.