Did you know that the IRS has rule that if you cheat on your taxes, you are required to voluntarily preserve your records for a longer amount of time?
Period of Limitations that apply to income tax returns
- Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
- Keep records for 3 years from the date you filed your original return or 2 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.
- Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
- Keep records for 6 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.
- Keep records indefinitely if you do not file a return.
- Keep records indefinitely if you file a fraudulent return.
- Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
Someone who did not voluntarily pay all their taxes is supposed to voluntarily preserve records of their fraud indefinitely”. Of course, Al Sharpton famously had tax records “destroyed” by alleged fires twice! In 1997 and again in 2003, Al Sharpton claimed records were lost because of fires while being audited. The first time, his records were only destroyed by “smoke damage” from a fire in a hair salon next door to his office.
Would you be surprised to learn that the IRS ended 2021 with a colossal backlog of 35.3 million unprocessed returns?
According to the National Taxpayer Advocate [NTA], the IRS is more backed up, by far, than at any time in its history. Delays in processing 2021 tax returns are expected. The IRS ended 2019 with a mere 7.4 million unprocessed returns.
The US government sent the already struggling IRS into a downward spiral with the 2020 lockdown. Then came the stimulus checks, which resulted in incredible demand for customer service.
The NTA says that IRS received an unprecedented 85 million phone calls to its main 1040 customer support line in 2021. At one point, the IRS was receiving over one thousand calls per second. Only three percent of phone calls in 2021 resulted in a customer being connected to a live person.