Tax Returns
One question we get asked a lot: How long to keep individual tax returns? You should keep your 1040 for at least three years. That’s how long IRS has to question items on your return and to bill you for any additional tax that may be due. It’s also the timeframe for you to file an amended return and seek a refund. IRS can go back up to six years if over 25% of income is omitted from your return. If fraud is proved, there is no limit. State tax returns may have to be retained longer.
You may want to keep some returns and tax records for more than three years. Here are some examples: Hold on to records that establish the tax basis of securities or real estate for at least three years after you dispose of the property. If you’ve made nondeductible contributions to IRAs or post-tax payments to 401(k)s, save records until three years after the accounts are depleted. If you inherit property that you might eventually sell, you’ll need to know the date-of-death value of the asset, so keep documentation of this figure until three years after you sell the property.
Don’t fret if you need information on a tax return that you’ve thrown out. There are a few ways to get a tax transcript, which is a summary of key data on your tax return. Individuals who have online accounts with IRS can go on its site to access their transcripts and print them out. If you don’t have an online account, you can set one up. Alternatively, you can call IRS toll-free at 800-908-9946 to have a transcript sent to you, or you may submit Form 4506-T by mail. People seeking copies of tax returns must request them by mail on Form 4506.
Tax Disputes
Watch what you cop to in a guilty plea. IRS may use it against you, as a man who pled guilty to criminal tax evasion for the 2014 tax year discovered. After his guilty plea, IRS audited him and assessed a civil fraud penalty for 2014. The Service relied on the disclosures made by the man in his plea agreement for purposes of proving civil fraud. The man claimed this was wrong. But the Tax Court sided with IRS. His guilty plea to tax evasion in his criminal case precludes him from litigating the fraud penalty in his civil tax case (Miller, TC Memo. 2025-41).
Amended Returns
Have lots of patience once you file your amended tax return with IRS. IRS’s processing of most amended individual returns is taking longer than 45 days. Although most people can e-file amended returns, IRS workers manually review them. 63% of Form 1040-X filings processed by IRS’s accounts management function and 73% of such filings processed by the agency’s submission processing function are included in overaged inventory, meaning processing time is greater than 45 days. IRS says it is currently processing paper amended returns received in March 2025. Use IRS’s “Where’s My Amended Return” to check the status of a filed 1040-X.