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TAX PRACTICE RESPONSIBILITIES
Documentation and
recordkeeping for
tax practitioners
Editor: During the course of their work, tax refunds for which they are a tax preparer
Stephen P. Valenti, CPA practitioners accumulate volumes of as defined in Sec. 7701(a)(36).
paper documents and electronic files A common assumption is that tax
Author: (hereinafter collectively referred to as preparers are required to retain a copy
Karen L. Jones, CPA records). This often leads to questions of every tax return they prepare. How-
such as: ever, Sec. 6107(b) requires that the tax
■ What records are required to be preparer retain a completed copy of any
retained? return or claim for refund or maintain
■ In addition to records that must a list with the names and taxpayer
be retained, what other records are identification numbers of the taxpayers
The AICPA provides prudent to be retained? for whom the returns or claims were
extensive guidance ■ How long should the records be prepared.
While keeping an actual copy of the
retained?
to help practitioners ■ How can records be protected tax return or claim for refund prepared
structure a record- securely? might not be required, it may be prudent
retention policy that ■ How should requests for the retained to do so, as discussed in a following
section of this column. The return cop-
records be addressed?
complies with the A tax practitioner’s records can be ies or the list must be maintained for
Internal Revenue loosely categorized into two groups: three years after the close of the return
Code and the AICPA ■ Firm business records; and period (as defined in Sec. 6060(c)). Un-
■
Work product and documentation
fortunately, the term “return period” as
Code of Professional records. defined for this section is most likely not
This column focuses on discussing
Conduct. these questions relative to work product the period that most practitioners would
anticipate. Rather, it is the 12-month
and documentation records. period beginning on July 1 of each year
and is unrelated to the tax return period
Recordkeeping requirements or the tax return deadline.
There is no single comprehensive list For example, a tax preparer prepares
of the records a tax practitioner must and delivers an individual 2022 return
retain in the Internal Revenue Code or in August 2023. The “return period” per
other authoritative source that is easily the Sec. 6060(c) definition ends on June
referenced. Rather, the requirements 30, 2024, so a copy of the return (or the
are contained throughout the Code list) would need to be maintained until
and the Treasury regulations, based on June 30, 2027. A tax practitioner who PHOTO BY SVCAN/ISTOCK
topic. When considering recordkeeping fails to retain a copy or list as required by
requirements, tax practitioners should Sec. 6107(b) may be assessed a penalty
focus on the tax returns or claims for of $50 for each failure, with a maximum
42 February 2023 The Tax Adviser
