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Statute of limitations

Question
What does the IRS apply a statue of limitations for keeping records? 
Answer
In general, the statue of limitations for keeping records that apply to your tax filing is either three years after the due date of your return or two years after the date the tax was paid -- whichever is later.

In some cased, records must be kept even longer. For example, you need to keep records to support the basis in property owned by the business. You also need to keep records for depreciation and carryovers.

There is no statute of limitations when the IRS suspects fraud. 
Brain Trust contributor: Author of J.K. Lasser's Small Business Taxes 2007
Related Categories: Accounting, Finance, Taxes, Legal
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