SECTION 4. IMAGING SYSTEM

REQUIREMENTS

.01 General Requirements of an Imaging System .

(1) An imaging system for maintaining books and records for purposes of § 6001 must create accurate and complete electronic images of hardcopy documents, and must index, store, preserve, retrieve, and reproduce imaged documents.

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that the observer must be able to recognize a group of letters or numerals as words or complete numbers. The taxpayer must ensure that the reproduction process maintains the legibility and readability of the image being reproduced. Taxpayers may use reasonable data compression or formatting technologies as part of their imaging system so long as the requirements of this revenue procedure are satisfied.

(6) The taxpayer must retain imaged documents until their contents are no longer material to the administration of the Internal Revenue laws under § 1.6001–1(e).

(7) The taxpayer must be able to retrieve and reproduce imaged documents at the time of a Service examination. Reproduction includes the ability to print a legible and readable hardcopy of any imaged document.

(8) The taxpayer must provide the Service, at the time of an examination, or for the tests described in section 5 of this revenue procedure, with the resources ( e.g., appropriate hardware and software, personnel, documentation, etc.) necessary for promptly locating, retrieving, reading, and reproducing on paper any imaged document.

(9) The taxpayer may use more than one imaging system. In that event, each system must meet the requirements of this revenue procedure. Imaged documents that are contained in a system with respect to which the taxpayer ceases to maintain the hardware and the software necessary to satisfy the conditions of this revenue procedure will be deemed destroyed by the taxpayer unless the existing imaged documents are converted to a format compatible with an imaging system that the taxpayer continues to maintain.

(10) An imaging system must not be subject, in whole or in part, to any agreement (such as a contract or license) that would limit or restrict the Service’s access to and use of the imaging system on the taxpayer’s premises (or such other place where the imaging system is maintained), including personnel, hardware, software, files, indexes and software documentation.

.02 Requirements of an Indexing System .

(1) For purposes of this revenue procedure, an indexing system is a system that permits the rapid identification and retrieval for viewing or reproducing of relevant documents

maintained in an imaging system. For example, an indexing system might consist of assigning each imaged document a unique identification number and maintaining a separate database that contains descriptions of each imaged document along with that document’s identification number. In addition, any system used to maintain, organize, or coordinate multiple imaging systems is treated as an indexing system under this revenue procedure. The requirement to maintain an indexing system will be satisfied if the indexing system is functionally comparable to a reasonable hardcopy filing system. The requirement to maintain an indexing system does not require that a separate imaged document description database be maintained if comparable results can be achieved without a separate description database.

(2) Reasonable controls must be undertaken to protect the indexing system against the unauthorized creation of, addition to, alteration of, deletion of, or deterioration of any entries.

.03 Recommended Practices . The implementation of records management practices is a business decision that is solely within the discretion of the taxpayer. Records management practices may include the labeling of documents, providing a secure storage environment, creating back-up copies, selecting an off-site storage location, retaining hardcopies of illegible documents or documents that cannot be accurately or completely imaged or reproduced under the imaging system, and testing to confirm records integrity.