The U.S. tax season started on January 27 and people have until April 15 to file their taxes.
Over 140 million taxpayers are anticipated to file their returns, and at this time, inquiries concerning the retention period of records may come up.
With response speeds of fewer than five minutes, the agency stated that it is committed to upholding its service levels and anticipates issuing refunds in the majority of cases within 21 days.
How long are records of tax returns retained?
The IRS advises that it be at least three years after filing, although the exact time will depend on the activity, expense, or event that the paper documents.
“In general, you must keep records that support an item of income, deduction or credit shown on your tax return until the statute of limitations for that return expires,” the Internal Revenue Service stated on its website.
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The IRS lists the statute of limitations for income tax returns as follows:
- If you are not affected by circumstances (4), (5), and (6) below, keep records for three years.
- If you file a claim for credit or refund after filing your return, you must keep records for three years from the date of your initial return or two years from the day you paid the tax, whichever comes first.
- If you submit a claim for a loss brought on by worthless securities or a bad debt deduction, you must keep documents for seven years.
- If you fail to disclose income that exceeds 25% of the gross income reported on your return, you must keep records for six years.
- If you don’t submit a return, keep your records forever.
- In the event that you file a bogus return, keep the records forever.
- Maintain employment tax documentation for a minimum of four years following the date of payment or the tax’s payable date, whichever comes first.
