IRS record keeping guide
How long should tax records be kept?
A tax payer should keep most tax
records for at least 3 years and preferably for 6 years.
The IRS has 3 years to conduct IRS audit on most tax
returns and 6 years if the IRS can demonstrate
There is no limitation period if the
IRS can prove
Keep some tax records forever
Some tax records should be kept forever.
These tax records which should be kept long term primarily
relate to investments and are needed to compute the investment
cost (the basis) when the investment is sold.
Examples of these long
term tax records are stock, bond, mutual fund, and
retirement account statement showing purchases, reinvested
dividends and or interest and sale proceeds. Without these tax
records, tax payers inevitably pay more taxes than is
necessary. A tax payer can usually avoid this increased
tax payments by keeping the necessary tax records.