Small Business Taxes & Management

Special Report

IRS Accepting Tax Records in Electronic Format


Small Business Taxes & ManagementTM--Copyright 2010, A/N Group, Inc.


In a recent article published on the IRS Web page, the Service has announced that it will now accept tax records in electronic format.

The IRS has reported it has recently completed training for revenue agents on QuickBooks® Premier Accountant Edition 2010 software. Approximately 1,100 agents were trained and are now being encouraged to request and accept taxpayers’ QuickBooks files, as appropriate. The IRS is also able to accept electronic records from Peachtree® accounting software. Electronic files should be provided on a CD, DVD, or flash/jump drive to ensure security of the files. E-mail should not be used to transmit the electronic records.

Obtaining the taxpayer's accounting records in electronic format provides significant advantages:

The legal authority for requesting a taxpayer's QuickBooks backup files and accounting records in electronic format is based on IRC Section 6001, Regulation 1.6001-1(a) and -1(e), Revenue Ruling 71-20 and Revenue Procedure 98-25. Rev. Proc. 98-25 does not prevent or exempt a taxpayer from providing electronic records, if such records exist.

Electronic information management has become the standard in business and will now be used to enhance the examination process. The ability to conduct audits using these software options will be available on an increasing basis as revenue agents begin to work with the new software. It is anticipated that this new audit tool will increase the speed and efficiency of field examinations, reduce taxpayer burden, and be a positive development for taxpayers, their representatives and the IRS.

Disclaimer of Endorsement: Reference above to any specific commercial products, process, or service by trade name, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by the Internal Revenue Service.


Copyright 2010 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536

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--Last Update 10/27/10