On 10/16/21 2:39 AM, Stuart O. Bronstein wrote:
"Rick" <rick@nospam.com> wrote in news:skcjhu$def$1@gioia.aioe.org:
I think the best one in the IRS reg is #6 - "Keep records
indefinitely if you file a fraudulent return." This kind of goes
with the IRS requirement that you have to pay taxes on illegal
income. Not speaking from experience, of course. but I would
think a person who files a fraudulent return and/or who hides
illegal income is probably not too concerned about how many years
of records to keep.
For most people, I think the 7-year guideline, though technically
unnecessary in most situations, is probably good enough and
certainly easy to remember. Personally, I keep enough years of my
personal tax filings to fill up one drawer of a file cabinet,
though I have digital records of the actual return and attachments
going back 30 years.
For most issues the statute of limitations is three or six years, so
holding on to documents for seven years should normally suffice. But
when there has been fraud, there is no statute of limitations.
But there's also another issue. There is sometimes information on a
return that depends on information from prior returns. And the
string of that information can go on for many more than seven years.
So there may be certain situations where returns should be kept for
many more years, in case an issue comes up that could depend on
information on a return from many years in the past.
Just an example - rental property. I've bought and sold. The one
property I own is now 7 years old. I'm happy to keep the tax returns
that can document the facts regarding income, depreciation, etc, and
that all losses were carried forward each year.
Now, I suppose the IRS has transcripts of all prior years, but I'll keep
my own copies as well.
Another - cost basis for stocks. I don't recall when brokers were
required to track this, but this is a recent change for old people (just
looked it up - 1/1/2011. A bit over 10 years. Recent). To be clear -
purchases are not reported to the irs, so a purchase is not on the
return. But you know it's in that year's manila folder you want to throw
out.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)