IRS defends accounting software file request

Posted on May 10, 2011

The IRS defended its request to receive the accounting software files of certain small business taxpayers under examination against serious concerns raised by the AICPA.

During examinations by the IRS Small Business/Self-Employed (SB/SE) Division, the IRS claimed it’s necessary to review “an exact copy of the original electronic data file be provided to the examiner and not an altered version.”

“Only an exact copy of the original file includes the unaltered metadata which allows examiners to properly consider the integrity and veracity of the electronic files through use of such means as reports generated by the software program that may help to identify deleted or altered entries,” the IRS responded to the AICPA.

The AICPA began discussions with the IRS SB/SE division after receiving multiple inquiries from members concerned with protecting their records stored in the accounting software, including income, expenses, assets and other pertinent information. 

The AICPA argued that a “taxpayer should have the right to ‘redact’ the software file and turn over only the data that is responsive and relevant to the examination – but no more.”

As published by http://www.ohioscpa.com/PublicArticle.aspx?ID=3456



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