The IRS requires receipts to be saved for expenses in excess of $25. This can become a burden for our filing systems, particularly when it comes to little receipts for meals and miscellaneous expenses. And, these receipts tend to fade over time (especially the yellow copies of credit card receipts) so that by the time the IRS audits you, the receipt is illegible.
I think the best answer to this dilemma is to purchase one of the many scanning products that are available. You can get a scanner that is specifically for your receipts or you can use a normal scanner. The advantage of the receipt scanners is that they come with software to organize your receipts electronically. Kind of an electronic filing system. Some even maintain that they can download your receipts directly into Quickbooks.
I haven't personally used the scanning software, but I maintain all of my receipts electronically. My partner won't even let me bring any hard copy receipts to her office. She insists that they all be scanned and emailed to her. Since the IRS accepts scanned copies, there really is no reason for keeping hard copy receipts any more.
I encourage everyone to take advantage of this technology and to get your tax documentation in order. If you are a client of ours, we are very happy to accept scanned copies of any documentation you need to provide us to do your tax returns. In fact, our website is set up specifically so you can scan your documents and upload them to our secure site.