IRS audit QuickBooks fileAs we have discussed before, the IRS has the authority to request QuickBooks data files from US taxpayers as part of their audit procedures. (And not only QuickBooks – they can request Peachtree data as well.)

We also hear of state agencies and insurance companies sometimes requiring copies of QuickBooks data for their audits.

If you are selected for this, you can send them your regular QuickBooks data file, and they will have access to all your financial records, including the years before and after the audit period. The problem with that is it gives the auditors access to much more information than is necessary. Tax accountants worry about auditors going on “fishing expeditions” in those situations.

One approach that could prevent additional complications is to have an Audit Disclosure Copy created. The Audit Disclosure Copy contains only the QuickBooks information for the year under audit. That will give the auditors complete information for the audit period in question, but nothing beyond that.

Creation of an Audit Disclosure Copy is available as a third party service. Get more information here or call 1-800-999-9209.

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3 thoughts on “What if the IRS Wants My QuickBooks File?

  1. It is not the financial information I am concerned about, but access to customer, payroll & vendor records. Is there any way to prepare a file which prevents access to these areas?

    Reply
  2. If those kinds of accounts have transactions associated with them, then they have to be accessible in the data. QuickBooks 2012 Premier Accountant edition has some new features in its Condense Data command for “transactions outside of a date range” that may directly affect this discussion.

    Reply

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