How long should all Federal Tax records be kept according to regulations?

According to federal regulations, tax records should generally be kept for three years from the date you filed your tax return or the due date of the return, whichever is later. However, certain circumstances may require keeping them longer.

One such situation is when there is underreported income that exceeds 25% of the gross income shown on your tax return; in this case, the IRS recommends keeping records for six years. Additionally, if you do not file a return or if you file a fraudulent return, the IRS can request records indefinitely.

While the answer provided bypasses the most common requirement of three years, it is important to acknowledge that for typical circumstances around federal tax records, they are not needed for four years under federal rules. The three-year rule ensures taxpayers have the needed documents to substantiate their claims if audited within this timeframe. Keeping records for the appropriate duration ensures compliance with IRS regulations and protects taxpayers from potential penalties or issues regarding their tax filings.