Statue of Limitations


I get asked all the time, "how long should I keep my tax record?"  Most taxpayers think of limitations as a time frame for how long the IRS can audit your return. The periods are laid out in various IRS Publications.


But in general, here is a list of the periods:


Three years if you filed your return on time or with an extension and you did not underestimate your income by 25% and you did not file a fraudulent return               

• Six years if you file on time or with and extension but understated your income by more than 25%.

Forever - No Limit, if you filed a fraudulent return

Forever - No Limit, if you did not file a return

Three years after filing or two years after the tax was paid if you filed an amended return or other changes to your original return, such as a quick claim for refund
Seven years if you filed a claim for a loss from a worthless security or bad debt deduction

IF YOU HAVE EMPLOYEES, YOU MUST KEEP YOUR EMPLOYMENT RECORDS FOR FOUR YEARS AFTER THE DATE THE PAYROLL TAXES WERE PAID OR DUE, WHICHEVER IS LATER.

​​How long should I keep my records and receipts?


How Long to Keep Records
The statute of limitations tells you the time period during which the IRS can audit your returns.


If your returns are examined, you will need records that prove your deductions. This means you need to keep your records for longer than you might think. 


Assets such as your car, desk, computer, and office building are relevant to your tax return during their depreciable class lives.


If you are depreciating an asset, the depreciation shows up in those returns. If you used Section 179 to expense the assets, then you have potential recapture expense during the first eight years and you need to hang on to the proof (reciepts or other documents showing your either converting a personal item to a business asset or purchasing a business asset, even if it was traded for company stock or shares) for three years beyond the first eight or ELEVEN years total.


If you have any questions on how to make saving your records easier please feel free to contact the office (818) 990-6529​.

IRS and Other Important News

Warning signs of tax-related identity theft

​​In tax-related identity theft, thieves usually use stolen Social Security numbers to file false tax returns to claim a fraudulent refund. These criminals generally try to file the fraudulent return early in the filing season. Taxpayers may be unaware that their identity has been compromised until attempting to file their actual return.


Your tax preparer might receive the following signs that might indicate identity theft has occured:


1.  A rejected return with an IRS code stating that your SSN has already been used on a previous return. 

2.  The taxpayer receives an unexpected IRS notice that does not correlate to the tax returns you filed.

3.  A notice from the IRS stating taxpayer wages from an employer that you do not recognize.


If any of these things occur, you could be a victim of identity theft. Here are some recommended steps you can take:


1.  File a report with your local police

2.  File a complaint with the FTC at www.identitytheft.gov or call the FTC identity theft hotline at 877-438-4338.

3.  Contact one or more of the three major credit bureaus to place a fraud alert on your credit report.

     Equifax: 800-525-6285

     Experian: 888-397-3742

     TransUnion: 800-680-7289


If any of these things occur, you could be a victim of identity theft. Here are some recommended steps you can take:

1.  File a report with your local police
2.  File a complaint with the FTC at www.identitytheft.gov or call the FTC identity theft hotline at 877-438-4338.
3.  Contact one or more of the three major credit bureaus to place a fraud alert on your credit report.
     Equifax: 800-525-6285
     Experian: 888-397-3742
     TransUnion: 800-680-7289

4.  Close any accounts opened fraudulently

5.  Respond to any IRS notice by calling the number on the notice.

6. Complete form 14039, Identity Theft Affidavit, then mail or fax it according to the instructions.

7.  Continue to file your return and pay tax if needed; even if it is necessary to paper-file your return.

(If you have already contacted the IRS to no resolution, contact the Identity Protection Specialized Unit at 800-908-4490)




In tax-related identity theft, thieves usually use stolen Social Security numbers to file false tax returns to claim a fraudulent refund. These criminals generally try to file the fraudulent return early in the filing season. Taxpayers may be unaware that their identity has been compromised until attempting to file their actual return.


Your tax preparer might receive the following signs that might indicate identity theft has occured:

 1.  A rejected return with an IRS code stating that your  SSN has already been used on a previous return. 

2.  The taxpayer receives an unexpected IRS notice that does not correlate to the tax returns you filed.

3.  A notice from the IRS stating taxpayer wages from an employer that you do not recognize.


If any of these things occur, you could be a victim of identity theft. Here are some recommended steps you can take:


1.  File a report with your local police

2.  File a complaint with the FTC at www.identitytheft.gove or call the FTC identity theft hotline at 877-438-4338.

3.  Contact one or more of the three major credit bureaus to place a fraud alert on your credit report.

     Equifax: 800-525-6285

     Experian: 888-397-3742

     TransUnion: 800-680-7289

4.  Close any accounts opened fraudulently

5.  Respond to any IRS notice by calling the number on the notic.

6. Complete form 14039, Identity Theft Affidavit, then mail or fax it according to the instructions.

7.  Continue to file your return and pay tax if needed; even if it is necessary to paper-file your return.


(If 

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