Overview

The IRS accepts a wide range of electronic records as valid audit support when those records reliably reflect the underlying transactions and are preserved in a way that prevents misleading alteration. That means properly scanned paper receipts, digital invoices, bank/credit card statements, payroll files, and bookkeeping exports can all be used during an audit—as long as you follow standards that protect authenticity, integrity, and accessibility (IRS Publication 552) [source: IRS Recordkeeping].

This article explains what the IRS expects from electronic records, practical steps to prepare them for an audit, common pitfalls I see in practice, and how long to keep different types of digital records. I’ve helped clients convert to fully digital systems for over 15 years; the differences between a smooth audit and a painful one often come down to a few simple controls.

(References: IRS Publication 552 and the IRS Recordkeeping guidance — see links below.)

Legal basis and IRS guidance

Tax law requires taxpayers to keep adequate records to substantiate their returns (Internal Revenue Code §6001). The IRS’s practical guidance is summarized in Publication 552 and the general Recordkeeping pages on IRS.gov, which make clear that electronic records are acceptable when they are complete, accurate, and retrievable. The IRS will evaluate whether an electronic copy is a reliable reproduction of the original and whether sufficient controls are in place to prevent alteration.

Key takeaways from official guidance:

  • The IRS does not require paper originals for most items if a trustworthy electronic copy exists. (IRS Recordkeeping)
  • Taxpayers are responsible for maintaining records that support items shown on returns and for retaining records for the appropriate statutory periods.

What types of electronic records are commonly accepted

  • Scanned receipts and invoices (high-resolution PDFs)
  • Electronic bank and credit card statements (PDFs or native statements downloaded from the bank)
  • Accounting software exports and reports (QuickBooks, Xero, FreshBooks exports in PDF/CSV)
  • Electronic payroll records and payroll tax filings
  • Time tracking, mileage logs, and expense tracking app records
  • Email confirmations and vendor electronic invoices
  • Cloud backup copies and system logs

Each of these is acceptable when presented in a clear, verifiable format that preserves key transactional data (dates, amounts, payees, invoice numbers, supporting metadata).

What the IRS looks for: authenticity, integrity, and usability

When an examiner reviews electronic records, they evaluate three practical characteristics:

  1. Authenticity
  • Can the taxpayer show the electronic file is a true representation of the original transaction? Evidence can include the original electronic file, a verified scanned image of a paper original, or an export from the accounting system with matching audit logs.
  1. Integrity
  • Has the record been preserved to prevent undetected alteration? Controls include write-once file formats (PDF/A), checksums or hashing, and system audit trails that log who created or changed files and when.
  1. Usability/Accessibility
  • Are files organized, labeled, and retrievable? The IRS expects records to be provided in a format the examiner can reasonably use—commonly searchable PDFs, CSV exports, or native files accompanied by an index.

Practical controls that demonstrate these three factors are discussed in the next section.

Practical steps to make electronic records audit-ready

Use a consistent, documented approach. Below are specific actions you can implement immediately.

  1. Create a written recordkeeping policy
  • Define what to scan, naming conventions, folder structure, and retention schedule. Document scanning resolutions (300 DPI recommended for receipts) and file formats (PDF/A for long-term archival).
  1. Scan and preserve source documents
  • Scan paper receipts promptly. Save both the image (PDF) and an index entry that includes date, vendor, amount, purpose, and associated tax return line.
  1. Use reliable accounting software and export capabilities
  • Use reputable packages (QuickBooks, Xero, etc.). Regularly export backup files and human-readable reports (PDF/CSV) and keep copies offsite or in a secure cloud vault.
  1. Preserve metadata and audit trails
  • Keep system logs that show who created, viewed, or changed files. If an item is edited, maintain version history to demonstrate chain of custody.
  1. Protect integrity with cryptographic or procedural controls
  • Use file hashing (MD5/SHA256) for critical records, or rely on storage solutions that provide immutability or write-once protections. Many cloud providers offer object-lock or immutable storage tiers.
  1. Convert to durable formats for long-term retention
  • Use PDF/A for documents you will archive. For databases, export standardized CSV or XML copies with explanatory schemas.
  1. Backup and disaster recovery
  • Maintain automated, routine backups. Use at least one offsite or cloud copy and test restores periodically.
  1. Maintain an index and retrieval plan
  • Keep a searchable index or spreadsheet that maps each electronic file to the tax return line it supports. Include file paths, dates, and brief descriptions.
  1. Train staff and contractors
  • Ensure anyone who handles records follows the documented policy, including how to name files, where to store them, and how to redact personal data when appropriate.
  1. Consult the examiner before delivery
  • The IRS examiner or coordinator often has a preferred delivery method—secure portal, encrypted email, or portable media. Confirm expectations early to avoid rework.

Delivery options to the IRS

The IRS does not insist on a single media type. Examiners accept organized electronic files when they are readable and verifiable. Common delivery approaches include:

  • Secure portal upload (most modern exams use this)
  • Encrypted email attachments for small files
  • Portable media (encrypted USB drives) brought to an appointment
  • In-person access to cloud accounts for real-time review (with audit logs)

Always coordinate with the examiner about format, file structure, and encryption.

Retention periods and special cases

General guidance (see IRS Publication 552):

  • Keep records for at least three years from the date you filed the return, or two years from the date you paid the tax—whichever is later.
  • If you omit more than 25% of gross income, the IRS can go back six years.
  • Employment tax records, property records, and records related to tax-exempt status often require longer retention.

For property, keep records until the period of limitations expires for the year in which you dispose of the asset. When in doubt, retain supporting documents for capital assets until the related tax reporting period is closed.

(See IRS Recordkeeping guidance for detailed retention tables.)

Common mistakes I see

  • Poor naming conventions and disorganized folders—inspectors want to find specific transactions quickly.
  • Low-quality scans that omit vendor name, date, or amount.
  • Relying on temporary or proprietary formats without exporting readable copies (e.g., keeping only an app’s binary snapshot).
  • Lack of system audit logs or version history, which raises questions about integrity.
  • Not confirming the examiner’s preferred delivery format.

Correcting these issues proactively reduces friction in an examination and often shortens the audit timeframe.

Real-world example

A small business client moved entirely to cloud-based bookkeeping and automated receipt capture. When audited, the client provided a CSV export of sales with matching PDF invoices, a folder of scanned receipts (PDF/A), and system audit logs showing who uploaded each receipt. Because files were indexed by transaction and date and the company used immutable storage for monthly backups, the examiner accepted the electronic evidence without requesting paper originals—saving weeks of back-and-forth.

When to keep originals

If you are unsure whether a scanned copy will satisfy requirements (for example, for unique legal documents or original titles), retain the original until the statute of limitations runs. Originals are also advisable for complex property transactions, legal contracts, or documents where signatures or notarizations are disputed.

Links to related FinHelp guidance

These pages provide practical templates and checklists for naming, scanning, and retention schedules.

Authoritative sources

Professional disclaimer

This article is educational only and does not constitute tax or legal advice. For specific guidance about your tax records or an ongoing IRS examination, consult a qualified tax professional or attorney.