The IRS does not prescribe a specific format for IRA recordkeeping, but as the manager of a checkbook IRA, the responsibility for maintaining accurate plan records falls entirely on you.
In a conventional IRA invested in publicly traded securities, the custodian can observe and report on all account activity. With a checkbook IRA, the custodian holds the IRA but cannot see inside the LLC or trust. Investment decisions, transactions, income, and expenses all occur at the entity level, where you are in control.
That means you are the record of everything that happens in your plan. Good recordkeeping protects you in the event of an audit and supports your annual reporting obligations to your custodian.
Investment and transaction records are the foundation. For every investment your plan holds, maintain documentation of the purchase, any related contracts or agreements, ongoing income and expense receipts, and the eventual sale or disposition. Bank statements for the LLC or trust account serve as the primary activity log and should be retained without gaps.
Entity documents should be kept permanently. These include the LLC Operating Agreement or Trust Agreement, the EIN confirmation, any amendments to entity documents, and state registration records such as Articles of Organization for the LLC. These establish the legal basis of your plan structure.
Tax records require the longest retention. W-9s collected from vendors and any 1099-NECs your plan issues should be kept for at least several years following the tax year in which they were filed. If your plan files Form 990-T retain returns and supporting documentation accordingly.
Contribution, rollover, and Roth records should be kept for the life of the IRA. These records establish the tax character of funds in your account, including whether contributions were deductible or non-deductible, and the basis of any Roth funds. Losing these records can create significant tax complications for you or your beneficiaries.
Each year, your custodian requires a statement of fair market value for the LLC or trust as of December 31. This is not a tax filing, but it is a custodial obligation. The value you report flows to Form 5498, which your custodian files with the IRS annually.
You are responsible for gathering and providing that value.
| Record Type | Retention Period |
|---|---|
| Investment records (active holdings) | For the life of the investment |
| Investment records (disposed assets) | Several years after disposition |
| Bank statements | Several years after the applicable tax year |
| Entity documents | Permanently |
| Vendor W-9s and 1099-NECs issued | Several years after the applicable tax year |
| Form 990-T and supporting documents | Several years after the applicable tax year |
| Contribution, rollover, and Roth transaction records | Life of the IRA |
Does the IRS specify a format for IRA recordkeeping?
No. The IRS does not require a specific format or system. Digital records are acceptable. What matters is that records are complete, organized, and retrievable if your plan is ever audited.
What happens if I cannot produce records during an audit?
The burden of proof in an IRS audit rests with the account holder. If you cannot document that a transaction was conducted on behalf of the plan and in compliance with IRS rules, the IRS may treat the transaction as a distribution or a prohibited transaction. Either outcome can result in taxes and penalties.
Can I pay a bookkeeper or accountant from plan funds to help with recordkeeping?
Yes. Reasonable fees paid to professionals for services that directly support plan administration, such as bookkeeping or tax preparation related to the plan, may be paid from LLC or trust funds.
This information is provided for educational purposes only and should not be interpreted as tax, legal, or investment advice. Readers are encouraged to consult a qualified professional who can offer guidance based on their personal situation.