swaitsandClaude Opus 5.5
ad572ae89d
Stephen asked that specs come from recognized documents, not from anyone's memory. There is no single US bookkeeping bible; authority is layered, and this records it: - docs/spec/sources/: verbatim excerpts (whitespace normalized), each with URL, retrieval date, and the SHA-256 of the fetched file, of public-domain texts: Pacioli's 1494 treatise in Geijsbeek's 1914 translation (double entry, the trial balance, one money, write only forward, correct by opposite entry, close into capital); IRS Pub. 583, 538, 946, 15; the 1099-MISC/NEC instructions (2025 and 2026); 26 U.S.C. §6041, §6041A, §704; Treas. Reg. §1.263(a)-1(f) and -4(f); Notice 2015-82; Rev. Proc. 98-25; Form 1065 instructions; 17 U.S.C. §105. The excerpts were extracted by matching each passage against the fetched file, so none can contain text the source doesn't. - docs/spec/rules.md: the rule catalog, B-1 to B-22. Each rule says AUTHORITY, CONVENTION, or DECISION; cites its sources (FASB's Codification and Concepts Statement 8 and OpenStax quoted briefly, never copied: copyright and CC BY-NC-SA); and names the code that enforces it and the tests and proofs that check it. - Spec blocks in the code now carry SOURCE: lines into the catalog; AGENTS.md makes sourcing rule 0 of the formal-methods bar. Corrections the sources turned up: the de minimis limit is $500 in the regulation and $2,500 by Notice 2015-82 (both now cited); 1099 thresholds after 2026 are inflation-indexed, so the engine's flat $2,000 for 2027+ is an open question (B-19). Unverified ASC paragraphs (360-10-35-4, 340-10, 230-10-45-10, 606-10-55-37B, 210) are listed in docs/spec/README.md until someone with a FASB basic-view login reads them. Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com> Claude-Session: https://claude.ai/code/session_01GWVo7x3UHw5kwCUaWxiejX
5.9 KiB
Records, supporting documents, and the audit trail
Governs the receipt policy, the append-only journal, and retention. IRS Publication 583 (Rev. December 2024) and Rev. Proc. 98-25.
IRS Publication 583, Recordkeeping
Source: https://www.irs.gov/publications/p583
Retrieved: 2026-10-13
SHA-256 of the retrieved file (p583.txt): 9600ce300b4dad2e2dd69fcee64a0f807e0fa54dc13e512606294b66cc694cce
What records to keep
Except in a few cases, the law does not require any specific kind of records. You can choose any recordkeeping system suited to your business that clearly shows your income and expenses. The business you are in affects the type of records you need to keep for federal tax purposes. You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. See Choosing an Accounting Method, earlier. If you are in more than one business, you should keep a complete and separate set of records for each business. A corporation should keep minutes of board of directors' meetings. Your recordkeeping system should include a summary of your business transactions. This summary is ordinarily made in your books (for example, accounting journals and ledgers). Your books must show your gross income, as well as your deductions and credits.
Supporting documents required
In addition, you must keep supporting documents, explained later.
Supporting documents
Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. These documents contain information you need to record in your books. It is important to keep these documents because they support the entries in your books and on your tax return.
Double-entry
It is self-balancing because you record every transaction as a debit entry in one account and as a credit entry in another. Under this system, the total debits must equal the total credits after you post the journal entries to the ledger accounts. If the amounts do not balance, you have made an error and you must find and correct it.
How long to keep records
You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out.
Rev. Proc. 98-25 (machine-sensible records)
Source: https://www.irs.gov/pub/irs-drop/rp-98-25.pdf
Retrieved: 2026-10-13
SHA-256 of the retrieved file (rp.txt): e8287ab9b57cd0d18ad929c3ab63f6cccf95cb550219280fce27a571e83329e7
A taxpayer establishes this reconciliation by demonstrating the relationship (i.e., audit -8- trail): (a) between the total of the amounts in the taxpayer’s machine-sensible records by account and the account totals in the taxpayer’s books; and (b) between the total of the amounts in the taxpayer’s machine-sensible records by account and the taxpayer’s return. (3) The taxpayer must ensure that its machine-sensible records contain sufficient transaction-level detail so that the information and the source documents underlying the machine- sensible records can be identified. (4) All machine-sensible records required to be retained by this revenue procedure must be made available to the Service upon request and must be capable of being processed. (5) Except as otherwise required by sections 5.01(2) or (3) of this revenue procedure, a taxpayer is not required to create any machine-sensible record other than that created either in the ordinary course of its business or to establish return entries. For example, a taxpayer who does not create, in the ordinary course of its business, the electronic equivalent of a traditional paper document (such as an invoice) is not required by this revenue procedure to construct such a record, provided that the requirements of sections 5.01(2) and (3) are met. For requirements relating to hardcopy records, see section 11 of this revenue procedure. (6) A taxpayer’s disposition of a subsidiary company -9- does not relieve the taxpayer of its responsibilities under this revenue procedure. The files and documentation retained for the Service by, or for, a disposed subsidiary must be retained as otherwise required by this revenue procedure. .02 DBMS. (1) A taxpayer has the discretion to create files solely for the use of the Service. For example, a taxpayer that uses a DBMS may satisfy the provisions of this revenue procedure by creating and retaining a sequential file that contains the transaction-level detail from the DBMS and otherwise meets the requirements of this revenue procedure. (2) A taxpayer that creates a file described in section 5.02(1) of this revenue procedure must document the process that created the sequential file in order to establish the relationship between the file created and the original DBMS records. .03 EDI. (1) A taxpayer that uses EDI technology must retain machine-sensible records that alone, or in combination with any other records (e.g., underlying contracts, price lists, and price changes), contain all the information that § 6001 requires of hardcopy books and records. For example, a taxpayer that uses EDI technology receives electronic invoices from its suppliers. The taxpayer decides to retain the invoice data from completed and verified EDI transactions in its accounts payable system rather than retain the incoming EDI transactions. Neither the -10- EDI transactions, nor the accounts payable system, contain product descriptions or vendor names. To satisfy the requirements of § 6001, the taxpayer must supplement its EDI records with product code description lists and a vendor master file. (2) A taxpayer may capture the required detail for an EDI transaction at any level within its accounting system. However, the taxpayer must establish audit trail