"Joel Berry, CPA" <joelDELETE[at]sugarlandcpas.com> wrote:

- quote -

Thanks to all who replied. I used to keep much more
documentation than I do now. For all clients, I keep the
current return and three prior year returns. For some
clients, I keep copies of documents or information I might
need in the future.

I'm like Harlan in that I subscribe to the "clean desk"
philosophy. It makes my life much easier, and my paper load
more manageable.

Joel Berry, CPA
Sugar Land, Texas

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Joel Berry, CPA" <joelDELETE[at]sugarlandcpas.com> wrote:

- quote -

We've been scanning and shredding since late in 1999. We
keep every tax return we have ever filed for any client. We
now have three sets of files: current (1998 forward) which
are scanned, recent (1994-1997) which were in the file
cabinets when we started scanning, and deep storage
(pre-1994).

We keep every document that isn't an "important" original, a
waste of space, or requested back by the client. We've
cleaned out most of the "recent" files of their backup
documents. We haven't started deleting the scanned
supporting documents. We make copies of every W-2 before
attaching it to a return, so we can scan it the following
year.

We are trying to replicate our paper files as best we can on
computer.

--
bc

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Joel Berry, CPA <joelDELETE[at]sugarlandcpas.com> wrote:

- quote -

The goal I'm working ~toward~ at this point is to keep paper
files for not more than 5 years and electronic files (PDF, etc.)
for as long as technologically feasible. Except, with FORMER
clients, everything would go after 5 years.

- quote -

I try to keep very little. I'm inclined to keep "basis" items if
not too voluminous (stock or property purchase information,
etc.). As a matter of policy, I DON'T keep W-2s, but I ~might~
start keeping them now that I can easily scan them (although ~I~
don't understand why that [scanning] should influence my policy
<g> ). I only keep 1099s if there is an ~issue~ related to them
(disputed amounts, etc.).

- quote -

I view it as an attempt to provide a "balance" among various
factors, including defense of the return if audited, defense of
ME in the (highly unlikely <g> ) event of malpractice, convenience
to the client (many feel it is more convenient for THEM if I keep
their stuff and act like a secretarial/photocopy service), the
amount of space I have available for storage, and the protection
of client privacy (stuff in my possession can always be stolen or
seized by court order).

I know of CPAs who keep ALL of their client's tax data, including
original W-2s, 1099s, etc. They store it all in fireproof
cabinets (on the ground floor of the building, I presume <g> ).
But, given the rising concerns over privacy in the past few
years, I would seriously question the wisdom of that approach. I
mean, do you really want the responsibility of maintaining "safe
deposit boxes" for your clients? <g
In short, I'd say that my attitude on this question has changed
significantly in the past few years as the result of privacy
concerns. To a large extent, "client service" has taken a back
seat to "client privacy."

MTW

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Joel Berry, CPA" <joelDELETE[at]sugarlandcpas.com> wrote:

- quote -

All of them. I keep all of them in case I have to refer
back to them for some reason. Until my professional
liability company told me to stop discriminating I used to
keep former clients' files for 3 years after the last return
we prepared.

- quote -

Copies of most relevant documents provided by the client.
If I get a list of charitable contributions I make a copy.
If I get 300 canceled checks then I total them and make a
note of how I calculated the figure but I don't keep copies
of all the checks.

I have had too many cases of the client asking several years
later where I got a number from. For example, usually it is
"my fault" when the SS# is wrong. It really helps to be
able to pull out the list of SS# in their handwriting to
prove that it isn't "my fault."

Drew Edmundson, CPA (NC)
e-mail is my first name at nccpa dot com

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Joel Berry, CPA wrote:

- quote -

Normally four years retention of pertinant copies. By
pertinant I mean printed schedules, form 1040, etc in file
folder. I don't print out a copy of a return for all
clients, just those for which I might need a certain form or
schdule later in life. A one page summary of details is
printed for all clients, so some folders may just have four
pieces of paper in it, except for #2 below.

- quote -

Only what's mandated by efiling procedures.

- quote -

Hmmm, that I only have one file cabinet.

Seriously though, it's my clean desk philosophy basically,
which extends to files. Two and half drawers for tax
clients, half drawer for misc tax forms (mostly business
related), half drawer for client accounting records and half
for administrative folders.

One new client saw my clean desk and muses that I must not
be very busy. His last accountant had stuff stacked every
where,on desk, file cabinets, on floor. I just smiled.

Another advantage of clean desk, you have a place to prop
your feet for a quick snooze.

Cheer$,
Harlan Lunsford, EA in LA

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- quote -

If they are current, we keep all the years together in a
manila type envelope.

If they have left us, we shred after 3 years.

- quote -

Anything with withholding we keep and in the case of
1099-Rs, we normally keep a copy even if no withholding.
Certain clients that reinvest dividends in funds we keep a
copy of that too, depends on the client and their ability to
lose things.

- quote -

I don't know that there really were any, it just started
that way and kept progressing.

Helen, EA in PA
Member of The Tax Gang
President, PA Society of Enrolled Agents
Campaigning for NAEA Board of Directors - Looking for YOUR vote

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Another thread discussed the issue of "going paperless".
Some of the responses raised a couple of other questions for
me. I've discussed them with others in my office, but am
interested in other opinions regarding two issues:

1. How many years of tax returns do you keep for your
clients?

2. What client documentation, e.g. W-2s, 1099s, etc.,
do you keep?

3. What factors influence your decisons regarding
questions 1 and 2?

Thanks for any responses.

Joel Berry, CPA
Sugar Land, Texas

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