Retention of Tax Records

In general, except in cases of fraud or substantial understatements of income, the IRS can only assess tax within three years after a return was filed (or, if later, three years after the return was due). However, the problem with the three-year rule is that the assessment period is extended to six years if more than 25% of gross income is omitted from a return. Therefore, we recommend retaining your tax records for six years after the return was filed.