Does the IRS Keep Copies of Tax Returns?

Tax returns are fundamental financial documents that serve as a comprehensive record of an individual’s annual income, deductions, credits, and tax liability. These records are important for financial planning and verifying income for loans or other applications.

IRS Retention of Tax Returns

The Internal Revenue Service (IRS) maintains copies of filed tax returns. The agency keeps these records for administrative purposes, including verifying reported income, processing refunds, and conducting audits. This retention allows the IRS to ensure compliance with federal tax laws and to resolve any discrepancies.

The IRS retains tax returns for seven years or more to support its enforcement and administrative functions. This timeframe aligns with the statute of limitations for various tax-related issues. The agency’s ability to access past returns is important for addressing taxpayer inquiries or enforcement actions.

How to Obtain Your Tax Records from the IRS

If you need your tax records, the IRS offers several methods to obtain them. The quickest way is to request a tax transcript online or by mail using Form 4506-T. A tax transcript summarizes your tax return information, including adjusted gross income and line-by-line data, but it is not a copy of the actual filed return.

For an exact copy of your filed tax return, submit Form 4506. There is a fee of $43 for each copy requested. Processing mailed requests typically takes about 75 days to receive the copy.

You can also request a tax transcript by phone or through a tax professional. Online and phone requests for transcripts are available immediately, or within 5 to 10 days if mailed. It is important to know which type of document you need, a transcript for summarized data or a full copy of the return, as the process and fees differ.

Why You Should Keep Your Own Tax Records

Individuals should maintain their own copies of tax returns and all supporting documentation, such as W-2 forms, 1099 forms, and receipts for deductions. The IRS recommends keeping these records for at least three years from the date you filed your original return or the due date, whichever is later. This period aligns with the statute of limitations for the IRS to assess additional tax.

The retention period extends to six years if you underreport your gross income by more than 25% of the income reported on your return. If you claim a loss from worthless securities or a bad debt deduction, you should keep records for seven years. For unfiled or fraudulent returns, there is no statute of limitations, meaning records should be kept indefinitely.

Records related to assets, such as homes, stocks, or retirement accounts, should be retained until the statute of limitations expires for the year in which the asset is sold or fully withdrawn. This ensures you have documentation for calculating capital gains or losses.