Tuesday, February 28, 2006

Discarding receipts: IRS accepts scanned images

It's a bit quirky, but my Brother MFC 7820N device is now working as a networked scanner to my Mac and XP machines. I can put something on the flatbed or sheet feeder, press a button and walk away. In under a minute the document is scanned to a reasonably sized black and white 300 dpi 8.5x11 PDF stored on my OS X box. [1]

So now I wonder if I can toss the paper receipts -- at least for tax purposes. The IRS says yes (more on NeatReceipts below):
Welcome to NeatReceipts

Does the IRS accept digital receipts?

Yes. According to ruling Rev. Proc. 97-22, the IRS allows one to prepare, record, transfer, index, store, preserve, retrieve, and reproduce books and records by either electronically imaging hard copy documents to an electronic storage media, or transferring computerized books and records to an electronic storage media that allows them to be viewed or reproduced without using the original program.

Can I throw away my receipts once I have captured an acceptable image?

Yes. According to ruling Rev. Proc. 97-22, the IRS permits the destruction of the original hard copy books and records and the deletion of original computerized records after a taxpayer completes testing of the storage system.
NeatReceipts, incidentally, is a wonderful business idea. They provide custom software and a portable scanner for automated scanning and processing of receipts. I don't know how it works in practice; it has at least two big drawbacks from my perspective. For one it's XP only, and I'm trying to minimize the use of XP at home. For another I don't want yet another scanner. I have a multi-function device with a document scanner, a flat bed scanner, and a Nikon negative scanner. I just can't handle the hassle of another device to fuss with.

[1] I have to be logged in to the account that receives the transfer and I have the firewall disabled, I am trying to figure out what ports are in use so I can reenable the firewall -- but this machine is fairly protected anyway. I can't get things working as well with the XP box, it seems to ignore my configuration settings. I don't have confidence in the software I'm using -- there's no business model to make it robust and reliable. I do have confidence in PDF as an image format so I'll probably switch to something else some day.

1 comment:

Anonymous said...

Neat Receipts is now Mac-compatible. And you can export information to Quicken. Plus, the scanner is very small. But if you don't want another scanner, Neat Receipts now works with several third-party scanners. I love my Neat Receipts scanner and software. By the way, I don't work for them... I'm just a satisfied customer.

Check it out here:
http://www.neatco.com/products/neatreceipts-for-mac