Closing your company
Record retention after you close a business
Now that the business has closed, you want to know when the old files can go. The IRS requires a final return for the year you close, and the retention period for each record depends on what it backs up.
Those rules tell you when you may let records go. They do not tell you whether some of them are worth something first.
In this guide
01
The IRS periods
General rule
3 years
Unreported income over 25% of the gross income on the return
6 years
Bad debt or worthless securities deduction claims
7 years
No return filed, or a fraudulent return
Indefinitely
Employment tax records
At least 4 years after the tax is due or paid, whichever is later
Property records
Until the limitation period expires for the year you dispose of the property
| Situation | Keep records for |
|---|---|
| General rule | 3 years |
| Unreported income over 25% of the gross income on the return | 6 years |
| Bad debt or worthless securities deduction claims | 7 years |
| No return filed, or a fraudulent return | Indefinitely |
| Employment tax records | At least 4 years after the tax is due or paid, whichever is later |
| Property records | Until the limitation period expires for the year you dispose of the property |
Ask your accountant which period covers each set of records, and take this table with you.
02
Others who may need your files
The IRS suggests checking whether anyone else needs records before destroying them, naming insurers and creditors as examples. Former employees, landlords and lenders can also ask. Keep a short log of what you kept, what you destroyed and when.
03
The digital workspace is a different question
Tax rules mostly concern financial records. The email, Slack, docs and tickets that show how the company worked are what AI data buyers want, and they are often deleted by default when subscriptions lapse.
First, check if they could be licensed. Pewter, for example, accepts closed US companies that peaked at 20+ staff and kept 3+ years of data. See keeping a workspace alive and what dead-company data sells for.
FAQ
Questions, answered
How long must a closed business keep tax records?
Generally 3 years, longer in some cases: 6 years for large unreported income, 7 for bad debt or worthless securities claims, and indefinitely if no return was filed. Employment tax records at least 4 years.
Can I sell records I am required to keep?
Licensing a copy does not usually mean giving up the original. Ask your accountant and lawyer about your specific records.
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Keep reading
Sources
Every number on this page links back to one of these.
- 1IRS: how long should I keep records?irs.gov
- 2IRS: closing a businessirs.gov
- 3Pewter Datapewterdata.com
- 4SimpleClosure: what your startup's assets are worthsimpleclosure.com
- 5aitrainer.work: selling a closed company's dataaitrainer.work
- 6Forbes: AI's new training data is your old work Slacks and emails (16 Apr 2026)forbes.com
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