Many people in Minnesota assume that they should hold on to their tax returns for three years after the initial filing. In general, the Internal Revenue Service (IRS) has three years to perform an audit or assess additional taxes; three years is also the time limit during which people can file amended tax returns. However, there are exceptions to the three-year rule, and this could make it important to hold on to tax returns for much longer.
While Minnesota residents should not be overly concerned about being audited by the IRS, they should be aware of what could prompt an audit. There are multiple factors that can initiate a review of a return.
As many in Minnesota know, a number of crimes are associated with filing a tax return. It can be a crime to willfully fail to file a return, knowingly file a fraudulent return and obstruct justice during an investigation. However, the Supreme Court will now determine whether destroying business records without an ongoing investigation or audit can be considered obstruction of justice.