If it is your first time receiving a tax review notification from the IRS, it is normal. Never panic but start gathering documents associated with the need for tax audit as mentioned in the notification.
The length of time you should keep your tax records depends on the type of records and the timeframe for which the IRS can audit your returns. In general, the IRS keeps records of three years but this can be extended to six years if there is a substantial error on your return.
Here are some general guidelines for how long should You your keep tax records:
1. Tax returns:
Keep a copy of your tax returns and all supporting documents for three years from the date of filing your original return. If you filed for an extension, keep the records for three years from the date you filed your return.
2. W-2 forms:
Keep these forms for at least four years after the due date of the tax return or the date you actually filed the tax return, or whichever is later.
3. 1099 forms:
Keep these forms for at least four years after the due date of the tax return or the date you actually filed the tax return, whichever is later.
4. Records related to property:
Keep records related to the purchase, sale, or improvement of property for at least three years after the tax return in which the property was sold is filed.
5. Business records:
Keep all records related to your business, including receipts, invoices, and canceled checks, for at least six years.
It’s always a good idea to consult with a tax professional or the IRS for specific guidance on how long to keep your tax records, especially if you have a complex tax situation.