how many years must you keep construction invoices (land, building, parking areas, signs, etc.) before they can be destroyed or useless?
Country relating to Question: United States
State (if USA): Oklahoma
Only finding how long C-II scheduled drug invoices must be retained. Am interested in the Federal requirements (are they different from the states?)
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Yes, I am wanting an answer; however this is nothing to do with children. I began a business over 7 years ago and sold it only 2 years ago. I had all construction cost in a folder which I left with the business and evidently the new owner did not want it and it was destroyed. Now the IRS is auditing me concerning my basis for this cost and I cannot provide it. Some of the companies are out of business, some of the workers have died and so on. I know approximately how much the cost was as I did a projection beforehand and had to be close because I only had so much money to spend. Just want to know if there is a time limit on the retaining of this kind of info. I know it all has to do with capital gains, but they see it one way...
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Hello and thank you for the opportunity to assist you. There may be a slight delay between your follow ups and my replies as I am typing out my answer. Please remember that this is general information only, not legal advice, and no attorney-client relationship is formed.This depends on what kind of receipts these are, or rather, how they can apply. You must keep your records as long as they may be needed for the administration of any provision of the IRS. Generally, this means you must keep records that support items shown on your return until the period of limitations for that return runs out.The period of limitations is the period of time in which you can amend your return to claim a credit or refund or the IRS can assess additional tax:If you:-Owe additional tax, then it may be 3 years-Do not report income that you should and it is more than 25% of the gross income shown on your return, then it may be 6 years-File a fraudulent return, then it is no limit-Do not file a return, then it is no limit-File a claim for credit or refund after you filed your return, then it is later of 3 years or 2 years -after tax was paid.-File a claim for a loss from worthless securities, then it is 7 years(Publication 552)So as you can see, if they are claiming you defrauded the IRS, then there is "no limit" to how long you are supposed to keep the receipts. Most companies keep them 7 years. Of course this is ironic in that no one can "predict" that the IRS would claim this, so generally speaking, if it has been 7+ years, you can argue that you did not anticipate this matter to come up and have destroyed your receipts by standard practice, and that their destruction does not add to your guilt.Remember, the onus is on them to prove your guilt, and not on your to prove your innocence. However, IRS tends to be very aggressive so you may wish to retain counsel specializing in tax matters:http://www.okbar.org/public/services/referral.htmIf you cannot afford one, the Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level: http://www.irs.gov/pub/irs-pdf/p4134.pdfI hope this finds you well. Please click Reply to Expert to keep talking, or rate my answer when we are finished. Kindly rate my answer as one of the top three faces because this is how I get credit for my time with you. Otherwise, reply to chat more until we are finished and you are ready to rate. I work very hard to formulate an informative answer for you; please reciprocate my good faith. (You may always ask follow ups free after rating.)
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