As you may have heard, the IRS claims Lois Lerner’s emails are gone forever. Apparently Lerner was storing her archived email on her local drive when it crashed and could not be recovered.
I’m certainly not the first to suggest that this excuse might not fly if the roles were reversed, i.e. if the missing documents were tax related and the IRS was demanding them from Joe Taxpayer. In fact, I found some advice on safekeeping electronic records for the IRS that the IRS itself probably should probably consider adopting.
From an Indiana Accounting Firm:
These days, more and more business records are stored electronically. While this saves time and space, it also increases the risk of accidental loss or damage. A hard disk in a personal computer can crash at any time, perhaps erasing months of data. Make sure your computer system is backed up regularly, and keep the backup copy in a fireproof location, preferably offsite.
From USA Today:
The IRS allows electronic storage systems as long as they provide an accurate and accessible record of the data. Rosenberg recommends scanning your documents onto your computer then backing them up on a CD.
From a Money Talks News:
There’s a risk to storing important papers digitally — data loss. Almost everyone has suffered from a hard drive crash or stolen laptop. But while losing photos from your last vacation may be tragic, losing your tax receipts can be expensive in an audit.
While you could back up by duplicating your records on a thumb drive or other media, that could also be lost if your house burns down. Solution? The cloud.
If you’re storing your financial records electronically, you should back up your data, so you don’t lose your information if a computer’s hard drive fails, for instance. Cloud storage is one option, but not everyone is comfortable beaming their financial life into a distant server. So, you might want to save copies on a DVD or CD, or even on an external hard drive.
And this one is my favorite from a writer for Entrepreneur:
The IRS allows taxpayers to scan receipts and store them electronically. But keep a back-up, because crying about your hard drive crashing isn’t going to help you any more than “My dog ate my receipts.”