# How long to keep tax records?



## jargey3000 (Jan 25, 2011)

CRA says: The CRA recommends keeping your tax records for at least six years. This six-year period starts at the end of the tax year to which the records relate. I just completed my 2017 tax return. From the above, am I correct in saying I should keep my records back to 2012 (& burn any older ones, - 2011 & prior- if I want to)?


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## Just a Guy (Mar 27, 2012)

From what I understand, after 6 years yo need to apply to CRA to destroy the records. If they don’t send you a letter saying you can, you technically shouldn’t.


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## jargey3000 (Jan 25, 2011)

Oh?


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## Eclectic12 (Oct 20, 2010)

The tax book I bought in the 1980's said the same thing ... though I seem to recall it being seven years then apply to destroy the records.


Cheers


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## AltaRed (Jun 8, 2009)

CRA doesn't go looking back further than 7 years of tax records except in potential cases of tax fraud and criminal activity. That is the reason FIs also only say they hold online records for 7 years.

I destroy all my tax records (i.e. returns, tax slips, etc) after 7 years. The only thing one MUST keep is the ACB records of assets purchased but not yet sold, e.g. you still want your to keep your Trade Confirmations on assets still owned (or alternatively Annual Trading Summary for every year), including, for example, the ACB record of that Bell stock you bought in 1997.

I suspect those with business interests, including for example, investment real property, for a longer time to prove, for example, capital improvements used in CCA calculations.


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## fatcat (Nov 11, 2009)

good lord ... seriously ? ... i'm gonna send them a letter effectively saying "hey is there anything you guys might have missed ?" ... yikes, i wonder how many people actually do this

i keep everything for 10 years and then toss it ... at my age i have plausible deniability baked right in


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## jargey3000 (Jan 25, 2011)

fatcat said:


> good lord ... seriously ? ... i'm gonna send them a letter effectively saying "hey is there anything you guys might have missed ?" ... yikes, i wonder how many people actually do this
> 
> i keep everything for 10 years and then toss it ... at my age i have plausible deniability baked right in


i'm with you, fatty....


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## like_to_retire (Oct 9, 2016)

fatcat said:


> i keep everything for 10 years and then toss it ... at my age i have plausible deniability baked right in


hehe, I just looked at my nicely organized file cabinet of records for taxes and investments. 1988 - 2018 = 30 years. 

I won't have any problems proving my cost base for investments.

ltr


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## My Own Advisor (Sep 24, 2012)

They say 7, I keep 8 just in case then everything else is shredded.


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## Retired Peasant (Apr 22, 2013)

Be sure to keep any forms you filled out re special elections. for example.. T664 - Lifetime Capital Gains Exemption from 1994 - your executor will thank you.


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## AltaRed (Jun 8, 2009)

Retired Peasant said:


> Be sure to keep any forms you filled out re special elections. for example.. T664 - Lifetime Capital Gains Exemption from 1994 - your executor will thank you.


Indeed, assuming one still has any assets from that period. I don't, but in my case, I have kept my 2006 tax record showing my ex-pat return date to Canada, my brokerage statement for April 2006 when I did return to Canada, and the resetting of ACBs.


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## OnlyMyOpinion (Sep 1, 2013)

We decluttered and got rid of a lot of paper a few years ago (used to keep utility, visa statements, etc). We took it to a local shredding co and watched them shred. We removed superfluous paper from the tax files and reduced 40 years of files to 2 banker's boxes. The annual folders get progressively thicker over the years as investments, RE and tax forms get more complicated. Still have the Win/Quick/TurboTax apps that start in 1993 on 3.5" floppies and the digital returns that they created. 
Probably should get rid of the older box.


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## AltaRed (Jun 8, 2009)

Much easier than all that now for us. Except for a smattering of paper tax slips that still come in via snail mail, everything else is now in PDF digital form. I literally don't have more than 2-3 hanging folders less than an inch thick in the file cabinet any more and it is decreasing as I toss stuff older than 7 years. 

If I took the time some cold winter day to scan a dozen Annual Trading Summaries from earlier times, and some paper Trading Confirmations from earlier times, we would only have a half dozen tax slips per year for 7 years in one very thin hanging folder.


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## Just a Guy (Mar 27, 2012)

You guys can do whatever you want and destroy your records without the official letter. Of course, should something happen and CRA want those records and didn't give you permission, you'll get into trouble. It's not what you think is right, it's what CRA thinks is right. Probably won't be a problem for 99.9% of the people, but do you want to be the exception to the rule.


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## AltaRed (Jun 8, 2009)

Jumpin Jeepers Murphy.... much ado about nothing.... It is 6 years https://www.canada.ca/en/revenue-ag...-should-you-keep-your-income-tax-records.html

See also https://www.canada.ca/en/revenue-ag...ng-request-permission-destroy-them-early.html with the details articulated in https://www.canada.ca/content/dam/cra-arc/formspubs/pub/ic78-10r5/ic78-10r5-10e.pdf

Obviously, as discussed, you need to retain ACB records for assets you still own.


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## Just a Guy (Mar 27, 2012)

> Retention period
> 24. Books and records have to be kept for the period or periods provided by subsections 230(4) to (7) and section 5800 of the Income Tax Regulations or until the Minister gives written permission for their disposal. Failure to comply with this requirement could result in prosecution by the CRA.
> 
> 25. Subsection 230(4.1) of the Act requires every person who keeps records electronically to retain them in an electronically readable format for the retention period outlined in subsection 230(4).
> ...


From the above links


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## Spudd (Oct 11, 2011)

Just a Guy said:


> From the above links


From your quote:

Under the Act, books, records, and their related accounts and source documents, other than those referred to in paragraphs 27 and 28 below, have to be kept for a minimum of six years from the end of the last tax year to which they relate. The tax year is the fiscal period for corporations and the calendar year for all other taxpayers.

The Minister may exempt a person or class of persons from the requirement to keep records electronically according to subsection 230(4.2) of the Act.
Books and records may be destroyed *at an earlier time than outlined elsewhere in this circular if the Minister gives written permission for their disposal*. To get such permission, a person can use Form T137, Request for Destruction of Records, or can apply in writing to the director of his or her tax services office.


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## jargey3000 (Jan 25, 2011)

my head hurts....so...from all the above.......is what i asked in my opening post RIGHT? or WRONG?


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## Just a Guy (Mar 27, 2012)

Well, I posted the official government position, its as clear as mud...


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## like_to_retire (Oct 9, 2016)

jargey3000 said:


> my head hurts....so...from all the above.......is what i asked in my opening post RIGHT? or WRONG?


Normally, people keep tax records for 7 years. Shred the rest. Simple.

ltr


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## jargey3000 (Jan 25, 2011)

like_to_retire said:


> Normally, people keep tax records for 7 years. Shred the rest. Simple.
> 
> ltr


...OK...and to do that, I dont need a letter from God or the CRA ...RIGHT???


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> CRA doesn't go looking back further than 7 years of tax records except in potential cases of tax fraud and criminal activity.


Or when the local CRA rep changes then tells the business owner "you have been doing it wrong for fifteen years - pay up".


Cheers


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## Jimmy (May 19, 2017)

The CRA can normally only go back 3 yrs for reassessment, but if they suspect fraud or wrongdoing, it looks like they could go back as far as they want




> What is a Tax Assessment?
> 
> An assessment is, as the CRA puts it, designed to “promote awareness of and compliance with the laws it administers.” The normal reassessment period for Canadian income taxes is three years from the date that your tax return was initially assessed. This means if you file your 2014 income taxes on April 30, 2015 (on time) the CRA will issue the initial Notice of Assessment on June 1, 2015 and the reassessment period will last until June 1, 2018.
> 
> ...


http://taxsolutionscanada.com/cra-reassessment-how-far-back-can-it-go/


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## AltaRed (Jun 8, 2009)

Sure but the links I provided simply say to keep records for a minimum of 6 years (some business exceptions notwithstanding).

Unless Jargey is willfully committing tax fraud/evasion and otherwise being a slimy person. or in a shady business, keeping 2017 plus 6 years is all he needs to do. I wouldn't worry more than 10 seconds over shredding the older stuff... ACB documentation notwithstanding.

I have always believed in being as kind as possible to my eventual POA and Executor. My father apparently kept every f'ing piece of paper from the time he was a teenager and it took me days to shred all that stuff. If he hadn't died on me, I would have killed him instead. :/


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## jargey3000 (Jan 25, 2011)

AltaRed said:


> Unless Jargey is willfully committing tax fraud/evasion and otherwise being a slimy person. or in a shady business, keeping 2017 plus 6 years is all he needs to do. I wouldn't worry more than 10 seconds over shredding the older stuff... ACB documentation notwithstanding.
> 
> :/


alta ....ssssshhhhh!!!...fer god's sakes!! ya dont have to broadcast it !!!....


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## gardner (Feb 13, 2014)

AltaRed said:


> CRA doesn't go looking back further than 7 years of tax records except in potential cases of tax fraud and criminal activity.


Last year they reassessed my taxes going back to 2006 tax year -- about 10 years. They were wrong and I was able to produce the records to prove it. I even have the frameable letter saying "You're right, our mistake. We'll fix it. Sorry" from the CRA. But know that they can go back as long as they want on basically anything. I don't think there's any particular timeframe that truly limits them. My advise would be to get a couple of bankers boxes and keep everything forever.

EDIT: adding

http://www.dominiontaxlaw.com/how-to-handle-disputes-with-the-cra/



> FYI, the CRA takes the position that if you filed a tax return in a manner that is in any way inconsistent with their policies (which may or may not be consistent with the law) then you are at the very least negligent or careless. So the upshot is that as far as the CRA is concerned, if they want to, they can reassess you at any time for anything they do not like. That is also not the law as determined by the Tax Court, but that is just how the CRA rolls.


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## domelight (Oct 12, 2012)

Retired Peasant said:


> Be sure to keep any forms you filled out re special elections. for example.. T664 - Lifetime Capital Gains Exemption from 1994 - your executor will thank you.


. 
This post hits on an important fact no one accounts for. 

Yes if all you have is a simple return than yes 7 years will suffice. But..... if you have a taxable asset you should keep all related receipts until 7 years after disposed
1. As retired peasant said 1994 crystallization. Maybe a cottage or investment ?
2. Selling a rental property you've had forever ?
3. A business youve had for a long time (unless you have financials the original tax values have to often be guessed at). In many cases this will result in too much tax being paid 
4. Here's the worst.... when you inherit taxable property, usually your parents but not always (such as a cottage or rental or farm) in this case the value you received it at is VERY OFTEN only documented on the deceased tax return..... keep it this is your proof of your cost base or get something legal in writing. 

How long to keep the return ??? Keep the non asset receipts for 7 years but keep the returns forever. 
Also don't let the tax preparer give you a 3 page summary, get the whole return of you have asset transactions 
The recommended time is 6 years, keep in mind this is from the most recent date of re-assessment, so for example 2012 would get assessed in early 2013 ( this why people say 7 years). Generally cra audits 3 years back but if they find gross negligence. than really they could go many years more (it would have to be pretty bad for them to go beyond years)
Hope that saves some people some money


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## Eclectic12 (Oct 20, 2010)

Jimmy said:


> The CRA can normally only go back 3 yrs for reassessment, but if they suspect fraud or wrongdoing, it looks like they could go back as far as they want ...


While it is true that suspected fraud or wrongdoing will open the door to going back as far as they want - my understanding is they also have other ways of extending the period that is open to them.

Objections, appeals and their expiry dates seem to be one of them. Then too, the clock starts ticking with the initial assessment so those who wait ten years to file their return have extended CRA's time by ten years as well. A misrepresentation that is attributable to neglect, carelessness or wilful default when filing or supplying information is another time extension.

I'll have to do more digging as apparently there is some sort of waiver that if signed by the tax payer will remove the time limitation for the particular tax year.

https://www.taxdisputehelp.ca/reassessments/how-far-back-can-the-cra-go-to-reassess-me/
https://www.linkedin.com/pulse/cra-reassessment-how-far-back-can-go-james-bell

I also seem to recall an article says that each letter from CRA asking for more info restarts the three year clock. 


Cheers


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## Eclectic12 (Oct 20, 2010)

gardner said:


> AltaRed said:
> 
> 
> > CRA doesn't go looking back further than 7 years of tax records except in potential cases of tax fraud and criminal activity.
> ...


CRA first delayed calculating my pension adjustment reversal (PAR) due to the Ottawa Ice Storm of 1998 then after it was calculated, their clerk keyed the number in to replace my RRSP contribution room instead of adding the PAR to it - something like five tax returns were re-assessed.

Clearly they went back more than three years, though probably under the seven years - where it was their error, not mine. 
Neither was it any of the reasons that are typically listed for going beyond the three year period AFAICT.


Cheers


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## ian (Jun 18, 2016)

We keep our records for 10 years or so. We just put them together and through them in a bankers box that we store in the basement.

When we engaged a CA for tax purposes several years ago we had occasion to have both of our returns re-assessed going back six or seven years. The documentation that we retained made this a very straightforward process. We did not ask the CRA for an exception because of how far we went back. They simply processed the changes and gave us some refund cheques. There is one wrinkle to this question. My understanding is that the six year rule is based not on the tax year but on when one was assessed or re-assessed. So, we could not dispose of 2008 tax records IF our 2008 return(s) had be re-assessed in 2014. Our understanding is that the rule is based on date of assessment, not tax year.


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## Mortgage u/w (Feb 6, 2014)

_24. Books and records have to be kept for the period or periods provided by subsections 230(4) to (7) and section 5800 of the Income Tax Regulations *or* until the Minister gives written permission for their disposal. Failure to comply with this requirement could result in prosecution by the CRA._

Those little two letters I've underlined have a such a big impact on that sentence.

I'm with the others (and CRA) - keep 6 years (or 7 depending when you start counting).


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## My Own Advisor (Sep 24, 2012)

AltaRed said:


> Jumpin Jeepers Murphy.... much ado about nothing.... It is 6 years https://www.canada.ca/en/revenue-ag...-should-you-keep-your-income-tax-records.html
> 
> See also https://www.canada.ca/en/revenue-ag...ng-request-permission-destroy-them-early.html with the details articulated in https://www.canada.ca/content/dam/cra-arc/formspubs/pub/ic78-10r5/ic78-10r5-10e.pdf
> 
> Obviously, as discussed, you need to retain ACB records for assets you still own.


Agreed. CRA is welcome to contradict themselves but if you want to keep paper or electronic files beyond ACB for decades, your call


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## My Own Advisor (Sep 24, 2012)

Mortgage u/w said:


> _24. Books and records have to be kept for the period or periods provided by subsections 230(4) to (7) and section 5800 of the Income Tax Regulations *or* until the Minister gives written permission for their disposal. Failure to comply with this requirement could result in prosecution by the CRA._
> 
> Those little two letters I've underlined have a such a big impact on that sentence.
> 
> I'm with the others (and CRA) - keep 6 years (or 7 depending when you start counting).


What "Minister" is going to give written permission to tens of millions of taxpayers? I think that statement is rather vague but only included to show the authority/governance within CRA - nothing more.


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## Mortgage u/w (Feb 6, 2014)

My Own Advisor said:


> What "Minister" is going to give written permission to tens of millions of taxpayers? I think that statement is rather vague but only included to show the authority/governance within CRA - nothing more.


No minister will. 
I believe the context of that statement pertains to Persons currently in an audit and to the minority that request documents less than 6 years old to be destroyed.


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## Eclectic12 (Oct 20, 2010)

ian said:


> ... My understanding is that the six year rule is based not on the tax year but on when one was assessed or re-assessed. So, we could not dispose of 2008 tax records IF our 2008 return(s) had be re-assessed in 2014. Our understanding is that the rule is based on date of assessment, not tax year.


If I can find the article again ... I recall it saying that any communication from CRA asking for info would reset the clock.
So a letter in just under three years sent on a repeated schedule would keep the clock running indefinitely.


Cheers


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## Eclectic12 (Oct 20, 2010)

My Own Advisor said:


> Agreed. CRA is welcome to contradict themselves but if you want to keep paper or electronic files beyond ACB for decades, your call


If I find it again I will post the link. I seem to recall an article on electronic records saying that another contradiction was that for electronic records to be acceptable, the source had to be electronic.

More interesting info ... https://www2.deloitte.com/ca/en/pages/tax/articles/tax-records-six-years-to-life.html
http://drache.ca/articles/charities...he-cloud-and-books-and-records-on-the-ground/


Cheers


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## AltaRed (Jun 8, 2009)

My Own Advisor said:


> Agreed. CRA is welcome to contradict themselves but if you want to keep paper or electronic files beyond ACB for decades, your call


Not sure what you mean but taken one way... yes, anyone can keep decades of records if they want obviously. Taken the other way, you should be able to prove ACB for assets one still owns, so it pays to keep the Trade Confirmation slip, or the broker's Trading Summary for Bell stock purchased in 2002 that you still own. But one doesn't need anything else kept from 2002.


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## jargey3000 (Jan 25, 2011)

AltaRed said:


> Not sure what you mean but taken one way... yes, anyone can keep decades of records if they want obviously. Taken the other way, you should be able to prove ACB for assets one still owns, so it pays to keep the Trade Confirmation slip, or the broker's Trading Summary for Bell stock purchased in 2002 that you still own. But one doesn't need anything else kept from 2002.


say i had bought 100 shares of xyx back in '02
and sold them last year for a respectable gain. i'm a lousyrecord keeper, so i have no idea what i actually paid for them
i plug in a best-guess estimate for acb, but i miss it by a few pennies..
cra gonna come after me?


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## AltaRed (Jun 8, 2009)

They have no idea whether you are remotely correct or not (they don't keep ACB records) so how close you actually are is not relevant. They simply send you a letter to provide proof to back up your ACB number, which is what they do for everything they want back up on, e.g. medical deductions, etc, etc. That is when a copy of the Trade Confirmation slip comes in handy.... short of digging up a historical record on the internet. 

FWIW, I prefer to keep PDFs of my Annual Trading Summaries for each year. They are 1-2 pages in length and don't take up any space, and I don't even need to keep the Trading Confirmations.


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## ian (Jun 18, 2016)

I have done exactly the same. Keeping a bankers box or two has never been a big deal for us. Even when we downsized and stored all of our possessions in an 8X8X16 container we had no issue finding a spot for two bankers boxes of tax and financial records. And through 4 moves.

At one point we went back seven years and asked for an income tax return re-assessment. The accountant based our re-assessment request on the records that we had kept. You just never know.


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## fatcat (Nov 11, 2009)

i use a local storage facility for paper materials, you can store a bankers box for like $7 a year and can fit 5 years or more per box so storing records infinitely is an easy task, particularly as digital records are now more common

the acb problem seems to be why we are steadily shifting that responsibility onto the brokerages and we should assume that they will be able to store digital records easily for decades eventually

i heard on a documentary recently that we on earth now produce data on a daily basis that if it was printed out on both sides of a standard business letter and stacked, it would stretch to the sun and back 4 times and ... that is each day

digital storage is getting cheaper by the day


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## ian (Jun 18, 2016)

Our 2016 and 2107 T4 returns are now stored on a CD and filed away with the back up data. I did not see any sense in pulling off a hard copy. We use the broker summaries instead of the trade slips. 

Record keeping has become much more efficient, less time consumer, and certainly a great deal less bulky. Now that our finances have changed since retirement, I expect that we could keep 10 plus years of both returns very easily in one bankers box, plus a bunch of paperwork relating to real estate and pensions..


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## like_to_retire (Oct 9, 2016)

ian said:


> Our 2016 and 2107 T4 returns are now stored on a CD and filed away with the back up data.


Yeah, I have a bunch of floppy disks with data from a number of years of returns. Sure am glad I have a hard paper copy. 

ltr


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## humble_pie (Jun 7, 2009)

jargey3000 said:


> say i had bought 100 shares of xyx back in '02
> and sold them last year for a respectable gain. i'm a lousyrecord keeper, so i have no idea what i actually paid for them
> i plug in a best-guess estimate for acb, but i miss it by a few pennies..
> cra gonna come after me?




the fairly new CRM regulations require all brokers to maintain a cost base - often called "book value" - for each security. IIRC mandatory broker cost base reporting was in force & effect by mid-december 2016.

what did your broker show as the cost base for this holding immediately prior to your sale last year? that will be the figure the CRA will use if they "gonna come after you"

.


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## Eclectic12 (Oct 20, 2010)

like_to_retire said:


> ian said:
> 
> 
> > Our 2016 and 2107 T4 returns are now stored on a CD and filed away with the back up data ...
> ...


My condolences that the tax data hasn't migrated to something more recent. :biggrin:
Do you still have anything that would read them?


Some of my paper copies didn't survive the basement flood so I was happy to have electronic copies on USB, CD and portable HD.

I have also had some of the paper copies have the ink from one page migrate to the other page making reading a challenge. At least the text didn't do a magician's vanishing act like some of the sales receipts. :eek2:


Cheers


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