Updated October 2026
How long to keep business records after closing, and what to check before you destroy them
The IRS says a final return is filed for the year a business closes, and that how long to keep each business record depends on what it records. Those periods tell an owner when old records stop being needed for tax. They say nothing about whether the files are worth anything, and some of them may be.1
What the IRS says
The record periods in the IRS guide
The IRS guide "How long should I keep records?" lists four periods: 3 years in general; 6 years if unreported income is more than 25% of the gross income shown on the return; 7 years for a claim for a worthless securities or bad debt deduction; and indefinitely if no return, or a fraudulent return, was filed.2
Two kinds of record carry their own rule in the same guide. For employment tax records, the IRS says at least 4 years after the date the tax becomes due or is paid, whichever is later. For property records, it says until the period of limitations expires for the year in which the property is disposed of.3,4
Which of these periods covers a particular box of old records is not something we answer. That is a question for the IRS or the company's accountant. We quote the guide so an owner knows what to ask.
| Fact | Value and source |
|---|---|
| IRS record periods | 3 years in general; 6 years if unreported income is more than 25% of the gross income shown; 7 years for a worthless securities or bad debt claim; indefinitely if no return or a fraudulent return was filed |
| IRS period for employment tax records | At least 4 years after the date the tax becomes due or is paid, whichever is later |
| IRS period for property records | Until the period of limitations expires for the year in which the property is disposed of |
| IRS on closing a business | A final return is filed for the year the business closes; how long to keep each business record depends on what it records |
Not only the IRS
Someone else may want the old files kept longer
The IRS itself points past its own periods. Before discarding records, it says, check whether anyone else needs them, because an insurance company or creditors may require them to be kept longer than the IRS does.5
For a business that is closing, that list can include a lender, a landlord, an insurer handling an open claim, or the buyer of the company's assets. Ask each one in writing what they need kept, and file the replies with the closing papers.
A second look
Retained email and files may have a buyer
The records an owner keeps for tax are mostly ledgers, payroll reports and receipts. The records AI buyers ask about are different: email, Slack, shared documents and code. SimpleClosure, which handles startup wind-downs, reports 150+ data deals for wound-down companies, most of them between $10K and $100K.6
Those archives tend to vanish sooner than the tax files. aitrainer.work notes that Slack, Google Workspace and GitHub organizations get deleted after non-payment, and advises keeping the subscription running until a buyer has sampled the data.7
Our reading: the question "how long must we keep this?" and the question "is this worth licensing?" should be asked together. The first sets the earliest date anything can go. The second may give a reason to keep it a little longer.
Sequence
A sensible order before anything gets wiped
Start with a list of what exists and where it sits: paper files, the accounting system, mailboxes, chat, drives and repositories. Then ask the accountant which IRS periods apply to which records, and ask insurers and creditors what they need, as the IRS suggests. Then ask a licensing company whether the email and workspace data is worth a sample. Only after those three answers should anything be destroyed.5,7
FAQ
Questions, answered with sources
The IRS says a final return is filed for the year the business closes, and that how long to keep each record depends on what the record is for.1
The IRS guide gives 3 years in general, with longer periods of 6 years, 7 years or indefinitely in the specific situations it describes.2
At least 4 years after the date the tax becomes due or is paid, whichever is later, according to the IRS guide.3
The IRS says to keep them until the period of limitations expires for the year in which the property is disposed of.4
Yes. The IRS says to check before discarding anything, because an insurance company or creditors may require records to be kept longer than it does.5
We do not answer legal questions. Ask the licensing company: their team reviews this with you before anything is signed.
We do not answer legal questions. Ask the licensing company: their team reviews this with you before anything is signed.
Before you sign
Legal questions go to the licensing company
We do not answer legal questions. Ask the licensing company before you sign: their team reviews these with you.
Questions for this kind of business
- Does licensing a copy of old records change how long we must keep the originals for the IRS?
- If an insurer or creditor has asked us to hold certain records, can a copy of them still be licensed?
- Who owns this data: the company, an estate, or someone else?
- How is the payment taxed?
Questions for any buyer
- Is the license exclusive, and for how long?
- Can you sublicense the data, and to whom?
- Which AI labs will receive it, and will you tell us?
- How long do you keep it, and how is it deleted?
- What is your liability cap, and who indemnifies whom?
- Will the contract ban re-identification of people in the data?
- Who removes personal data, by what method, and do we approve it first?