When Is It Safe To Recycle Old Tax Records And Tax Returns?

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Most answers about when it is safe to get rid of old tax returns and records are wrong.

For example, some years ago I received a letter from the IRS saying it couldn’t find a tax return from one of my businesses from five years earlier. I still don’t know why they were looking for that five-year-old return at that time, but they were and couldn't find it. Apparently, they found the returns for the years before and after, but the one year was missing. The letter said if I already filed the return, I should send a copy.

Given the state of the IRS’s technology and resources, you can’t rely on a return to be properly recorded and retained by the IRS, even if it was filed electronically. When the IRS audits taxpayers or you raise a question with the IRS, one of the first things it often does is to ask for a copy of the actual tax return. The IRS generally keeps in the computers available to most of its employees only when it calls transcripts of the returns.

 

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