Recently, the courts have given the IRS the right to demand your software files. The IRS has gotten very aggressive in demanding the actual accounting software file, especially Quickbooks and other common software accounting programs. Before the advent of these software programs, providing a print out of the actual accounting data was usually sufficient for the IRS during an exam.
Now, with most agents being able to utilize these accounting software packages on their computers, they are demanding a backup of the whole accounting software, even if there are years in the accounting software that are not under exam. Also, any comments, memo or notes section of your software would be available for review by the IRS.
Just be careful what you write in your accounting software comments section. And remember, an IRS agent may be reading it in the future.
