Can I Keep Digital Copies of My Tax Records Instead of Paper?
Yes. You can keep only digital copies of your tax records, as long as your storage system and the copies meet the IRS criteria.
IRS Rules for Digital Tax Records
The IRS allows taxpayers to maintain electronic copies of their tax records instead of paper versions, provided that your storage system meets its conditions and the digital documents are:
- Clear and Legible:
- Scanned or digital copies must be readable and accurately represent the original paper documents.
- Complete:
- Include every part of the document, such as the front and back of forms, checks or receipts.
- Accessible:
- You must be able to retrieve these records promptly if required for an audit or other tax-related purposes.
What the IRS asks of an electronic storage system
Under Revenue Procedure 97-22, your electronic storage system has to pass five checks before you rely on digital copies of tax records alone and destroy any original:
Before you shred the paper, five IRS checks
A summary of Rev. Proc. 97-22, not the full procedure
- Transfer each record accurately and completely
- Index it so you can find it
- Reproduce it legibly, on screen and on paper
- Prevent and detect unauthorized changes or deletion
- Pass a quality check you run yourself
Test the system first
If a record cannot be transferred accurately and completely, keep the paper.
Source: IRS Rev. Proc. 97-22, section 4.01.
If your records start out electronic, in accounting software or a payment system, the IRS applies Rev. Proc. 98-25 to them, not Rev. Proc. 97-22. A business with assets of $10 million or more at the end of its tax year keeps those records, with documentation of the system. It keeps them in a form the IRS can retrieve and process. Members of a controlled group add their assets together for that test. You cannot replace the electronic record with a scanned printout.
Benefits of Digital Tax Records
You gain four things from digital tax records:
Space Saving:
Once your system meets the IRS conditions, you need fewer filing cabinets.
Improved Organization:
Categorize and tag files, and you find specific documents faster.
Eco-Friendly:
You use less paper.
Ease of Sharing:
Digital files can be securely shared with tax professionals or auditors when needed.
Best Practices for Storing Digital Tax Records
To keep your digital records secure and accessible, follow these four practices:
Secure Backups.
Use external hard drives, cloud storage, or both to create multiple backups. Regularly update backups to include the latest records.
Encryption and Password Protection.
Secure sensitive files with strong passwords or encryption tools. Use trusted security software to protect against cyber threats.
Organized Filing System.
Create a folder structure by year and category (e.g., income, deductions, property records). Use consistent file naming conventions for easier retrieval.
Retention Guidelines.
Keep each record for its IRS period of limitations: three years as the general rule, and longer in the cases the IRS lists.
How long to keep tax records before you delete them
The IRS sets the period of limitations for each record by what you put on the return, rather than one fixed number:
How long to keep tax records
IRS periods of limitation, Topic no. 305
- 3YearsThe general ruleCounted from the date you filed the return
- 4YearsIf you have employeesEmployment tax records, for at least four years after the tax is due or paid, whichever is later
- 6YearsIf income is left outOver 25% of gross income shown, or over $5,000 from foreign financial assets
- 7YearsBad debt or worthless securitiesTo claim a refund, from the date the return was due
- NoLimitNo valid return, or a fraudulent oneThe IRS can assess tax at any time
Keep property records until the period of limitations expires for the year of the taxable disposition.
Source: IRS Topic no. 305, read September 2026.
For how long to keep business tax records, the same periods apply, plus one. If you have employees, keep employment tax records for at least four years after the tax is due or paid, whichever is later. If you cannot tell which period a file is in, keep it.
Keeping digital tax records the IRS will accept
You can keep digital copies of your tax records instead of paper.
Keep them clear, complete, securely backed up and in a system that meets the IRS conditions.
Build an organized system, and you stay ready for an audit or a records request.
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Tax record support
Treat the information as general, and ask a CPA about your own records before you delete anything.
Get help organizing your tax records
Tell us how your records are kept today and what you are being asked for. We will tell you what to keep, what to scan and what your auditor or the IRS will want to see.
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Reviewed by George Dimov, CPA. Dimov Audit examines the records behind its clients' financial statements and provides bookkeeping services across all 50 states. Profile