The IRS typically has three years to audit returns. But it has six years if it suspects that the return understates income by more than 25 percent. And no statute of limitations applies if fraud is involved or the person fails to file.
Here is a handy Record Retention Schedule:
Copies of tax returns
Employee expense records
Tax/legal correcpondance
Personal investment records
Audit reports
Contracts and leases
IRA records
Canceled checks
Real estate records
Paid vendor invoices
Corporate minutes
Employee payroll records
Stock records
Depreciation Schedules
Bank statements
General ledger & journal
Sales records & journals |
Forever
3 years
Forever
6 years after sales
Forever
Forever
6 years after w/d
3 years
Forever
3 years
Forever
3 years
Forever
Tax life of asset + 3 yr
6 years
6 years
6 years |