How Long Should You Keep Your IRS Income Tax Return Records?

Don't Be So Quick to Toss Those Tax Returns

Three Years

The statute of limitations for the Internal Revenue Service (IRS) to conduct audits and tax assessments is three years. The three-year limitation also applies to the length of time a taxpayer can file an amended return (two years if the amended return is for a credit).

Six Years to Indefinitely

The IRS can challenge a return six years from the date of filing if it suspects a taxpayer under-reported income by 25 percent or more. Taxpayers who do not file a return or file a false return, are indefinitely open to a challenge.

Bottom Line

It is wise to keep records at least three years from the date of filing in case of an audit or tax assessment. According to the IRS, claims for a loss from valueless securities or bad debt deduction justifies holding tax records for seven years. It is also wise to make sure records are not needed for other purposes such as mortgages or insurance before discarding.

References

• Internal Revenue Service: IRS Audits
• Internal Revenue Service: How long should I keep records?