The IRS has shown some willingness to compromise. In his response, Wagner said that taxpayers may condense electronic data files for dates prior to the years under audit. However, if the scope of the audit expands, the IRS may request a copy of the archive file created during the condensing process. The IRS and AICPA are scheduled to discuss the issue again during the next couple of months, Goldstein says.

It's possible technology could offer a remedy. Software developers should be able to refine their applications so that business owners can more easily segregate tax from other business information, and one year of records from another.

Larry Nannis, CPA and principal with the Needham, Mass.-based accounting firm Levine, Katz, Nannis + Solomon, PC, says he has heard of some tax professionals exporting information from Quickbooks to Excel before submitting it to the IRS. The formatting of the files would let the IRS agents know that the data originated in Quickbooks, so it's not as though anyone is trying to cover his or her intentions, Nannis adds. From what he has heard, the IRS hasn't contested the submissions -- at least not yet.

While the issue is sorted out, CFOs will want to take steps to close out their files at the end of each fiscal year, if they haven't, rather than keeping multiple years within one file. And, they'll want to consider segregating tax and other information. "Start to implement safeguards to at least mitigate turning over extraneous data to the IRS," Goldstein says.