SECTION 3. SCOPE

computer data be available to process the data unless that program or system is necessary to:

(1) a tax-related computation ( e.g., LIFO inventories, insurance company loss reserve computations, and foreign tax credit computations); or

(2) the retrieval of data ( e.g., some data base systems processes where the taxpayer chooses not to create a sequential extract (see section 5.02 of this revenue procedure)).

.03 A “DBMS” is a software system that creates, controls, relates, retrieves, and provides accessibility to data stored in a data base.

.04 “EDI technology” is the computerto-computer exchange of business information.

.05 An “electronic storage system” is a system used to prepare, record, transfer, index, store, preserve, retrieve, and reproduce books and records by either: (1) electronically imaging hardcopy documents to an electronic storage media; or (2) transferring computerized books and records to an electronic storage media using a technique such as “COLD” (computer output to laser disk), which allows books and records to be viewed or reproduced without the use of the original program. See Rev. Proc. 97–22, 1997–13 I.R.B. 9, for electronic storage system requirements.

.06 A “machine-sensible record” is data in an electronic format that is intended for use by a computer. Machine-sensible records do not include paper records or paper records that have been converted to an electronic storage medium such as microfilm, microfiche, optical disk, or laser disk.