Storing Paperwork

Answer: The IRS requires that the originating document (for physicians, the encounter form or charge ticket) from which a charge was generated be retained for the audit period. The IRS can examine a tax return and make adjustments within three years from the date of its filing. This period increases to six years if the return contains a very large understatement of income. The period may be indefinite if fraud is suspected. Therefore, some malpractice carriers recommend retaining accounts receivable documents, bank statements, canceled checks, and encounter forms for seven years.