{"id":799,"date":"2019-11-18T12:21:41","date_gmt":"2019-11-18T17:21:41","guid":{"rendered":"http:\/\/www.scottfrickcpa.com\/?p=799"},"modified":"2019-11-18T12:21:41","modified_gmt":"2019-11-18T17:21:41","slug":"irs-offers-advice-small-business-record-keeping","status":"publish","type":"post","link":"http:\/\/www.scottfrickcpa.com\/irs-offers-advice-small-business-record-keeping\/","title":{"rendered":"IRS Offers Advice on Small Business Record Keeping"},"content":{"rendered":"
\n
\n

IRS Tax Tip 2019-157<\/a><\/span><\/p>\n

In a Tax Tip, the IRS has offered advice on small business record keeping. The advice concerns both how to keep records and for how long to keep records.<\/p>\n

Background<\/strong>. Because of the period of limitations that applies to income tax returns (i.e., the period of time in which a taxpayer can amend a tax return to claim a credit or refund, or the IRS can assess additional tax), the IRS recommends that taxpayers keep records for the following time periods:<\/p>\n

    \n
  1. Keep records for three years if situations (4), (5), and (6) below do not apply to you.<\/li>\n
  2. Keep records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.<\/li>\n
  3. Keep records for seven years if you file a claim for a loss from worthless securities or bad debt deduction.<\/li>\n
  4. Keep records for six years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.<\/li>\n
  5. Keep records indefinitely if you do not file a return.<\/li>\n
  6. Keep records indefinitely if you file a fraudulent return.<\/li>\n
  7. Keep employment tax records for at least four years after the date that the tax becomes due or is paid, whichever is later. (IRS.gov website)<\/li>\n<\/ol>\n

    IRS advice<\/strong>. In Tax Tip 2019-157, regarding small business record keeping, the IRS recommends:<\/p>\n