Last reviewed October 7, 2026 · By the NYBACS advisory team
Short answer
A foreign-owned US company should keep every record needed to support its returns: bank and payment-processor statements, invoices and receipts, contracts, payroll files, fixed-asset records, filed returns, and — specifically because of foreign ownership — evidence of every transaction with the foreign owner and related companies. General IRS guidance is to keep records at least three years after filing, longer in many situations, and records supporting Form 5472 must be available to the IRS on request.
Key takeaways
- Section 6001 requires every taxpayer to keep records sufficient to establish the amounts shown on its returns.
- Foreign-owned companies have an added duty under Section 6038A to keep records of related-party transactions; failing to maintain them can carry the same $25,000 penalty as failing to file Form 5472.
- The baseline retention period is three years from filing, extended to six years for substantial understatements and four years for employment tax records.
- Records for a year in which a required return was never filed should be kept indefinitely, because the assessment period may never start.
- Records can be kept electronically, but they must be legible, complete and retrievable when requested.
The core records every US company needs
The IRS does not prescribe a fixed list, but the records below are what a preparer, an auditor or an IRS examiner will ask for first.
| Record type | What it proves | Practical tip |
|---|---|---|
| Bank, card and fintech statements | Every inflow and outflow | Download monthly; many fintechs only show a limited history in-app |
| Payment-processor reports (Stripe, PayPal, Amazon, Shopify) | Gross sales, fees, refunds and payouts | Export settlement reports, not just payout totals |
| Sales invoices and customer contracts | Revenue and its timing | Keep signed contracts with the invoice trail |
| Purchase invoices and receipts | Deductible expenses | Receipts should name the company, not the founder personally |
| Payroll registers and contractor forms (W-9, W-8BEN, 1099, 1042-S) | Compensation and withholding | Collect forms before the first payment |
| Fixed-asset and depreciation records | Cost basis and depreciation | Keep purchase invoices until the asset is sold, plus the retention period |
| Filed returns, extensions and proof of filing | Compliance history | Keep fax confirmations and mailing receipts with each return |
All of these should tie to the general ledger, so the books — not a folder of PDFs — are the master record.
The extra layer foreign ownership adds
A US company that is 25% or more foreign-owned, and every foreign-owned single-member LLC, is subject to Section 6038A record-keeping in addition to the general rules. In practice this means keeping, for each related party:
- ownership evidence — the operating agreement or share register, and the foreign owner's identity, address, country and tax ID;
- funding records — every contribution, loan, repayment and distribution, with agreements where they exist;
- intercompany documentation — service agreements, invoices, pricing basis and payment proof for dealings with the owner's other companies;
- expenses paid from abroad — receipts for costs the owner paid personally on the company's behalf;
- exchange-rate support — the rates used to convert foreign-currency transactions to US dollars.
The IRS can request these records and expects them to be produced within a set time; certain records may need to be kept or made available in the US. Failing to maintain them is penalized in the same way as failing to file Form 5472.
How long to keep each type of record
The retention period is tied to how long the IRS can assess tax for the year, which the IRS summarizes as:
- 3 years from filing in the ordinary case;
- 6 years if income was underreported by more than 25% of the gross income shown;
- 7 years where a bad debt or worthless securities deduction is claimed;
- at least 4 years for employment tax records after the tax is due or paid;
- indefinitely where a return was not filed or was fraudulent.
For foreign-owned companies, the last point is especially relevant: where a required information return such as Form 5472 was not filed, the assessment window for that year can remain open. Formation documents, ownership records, EIN letters and capital records should be kept for the life of the company, and asset records until the retention period ends for the year the asset is disposed of.
Making records usable, not just stored
Keeping files is not the same as keeping records. A usable system has three features:
- One home. A shared cloud folder structured by year and category, linked to the accounting system, rather than documents scattered across founders' inboxes.
- Matched to transactions. Each bank entry has its receipt or invoice attached in the bookkeeping software, so an examiner's sample can be answered in minutes.
- Monthly discipline. Statements downloaded and reconciled monthly, before fintech portals roll off older data or an account is closed.
Companies that run this way find year-end tax filing, bank KYC refreshes and investor due diligence all draw on the same organized record.
Common mistakes to avoid
- Relying on a fintech or payment app as the only copy of statements, then losing access when the account is closed.
- Keeping receipts in the founder's personal name with no link to the company.
- Having no written record of owner loans or intercompany service arrangements.
- Discarding records after three years for a year in which Form 5472 was never filed.
- Not collecting W-8BEN or W-9 forms from contractors before paying them.
- Converting foreign-currency payments without keeping the exchange-rate source.
Documents and records to prepare
- Certificate of formation or incorporation, operating agreement or bylaws, and share or member register
- EIN confirmation letter and any tax classification elections
- Monthly bank, card, fintech and payment-processor statements
- Sales and purchase invoices, receipts and customer and vendor contracts
- Owner loan agreements, contribution and distribution records, intercompany agreements
- Payroll records and contractor tax forms
- Filed federal and state returns with proof of filing
NYBACS 360° support
How NYBACS helps
- Sets up a document structure and bookkeeping workflow that links every transaction to its supporting record.
- Maintains a related-party register covering the owner, family members and affiliated companies.
- Downloads and reconciles bank, fintech and processor statements monthly so no history is lost.
- Collects contractor tax forms and organizes payroll records for the required retention period.
- Assembles records on request for tax preparers, auditors, banks or IRS correspondence.
Frequently Asked Questions
Can I keep the company's records outside the US?
Records can generally be stored electronically and accessed from anywhere, but a foreign-owned company must be able to produce related-party records to the IRS when asked, and some must be maintained or made available in the US. Cloud storage that can be accessed and exported on request is the practical answer for most small companies.
Are scanned receipts acceptable?
Generally yes, if the electronic copy is complete, legible and reliably stored. The IRS has published standards for electronic record systems; a reputable accounting system with attached images usually meets the practical test.
Do I need to keep records of my personal payments for the company?
Yes. Payments you make personally on the company's behalf are related-party transactions and expenses of the company, so the receipts and the payment evidence belong in the company's records.
What records do banks ask for that the IRS doesn't?
Banks often ask for evidence of business activity — customer contracts, websites, invoices — and the source of funds the owner contributed. Keeping those with the tax records means one organized set serves both purposes.
