Sarasota residents are advised to keep a physical and digital copy of a tax return for as long as they live. This can be helpful in the event that the IRS claims a person hasn’t filed a return in a given year or filed a fraudulent return. Furthermore, the government generally has no deadline to come after a taxpayer who understates his or her income on a tax return.
This is true even if an investigation is launched in error. This means that a person still needs to prove that a return was filed or filed accurately even its because of inaccurate IRS records. As long as a taxpayer files a return in good faith, the IRS generally has three years to audit that return. A taxpayer has three years to amend a return if a mistake was discovered that may entitle that individual to a refund.
In the event that an audit occurs or a return is amended, a taxpayer should keep his or her return for an additional two years. The IRS has six years to audit a return if it believes a person understated his or her income by more than 25 percent. Keep a tax return for seven years when claiming a capital gains loss because of a bad security or if a loan was not repaid in full.
Failure to file a tax return or pay taxes owed could result in negative consequences for a taxpayer. If the IRS initiates an investigation, it may be in a person’s best interest to hire an attorney. The lawyer might be able to help a taxpayer gather relevant records and negotiate with the IRS. This may result in an investigation concluding without a taxpayer owing any additional money to the federal government.
Norton Hammersley of Sarasota business and tax law practice provides expert planning and advice to our individual and corporate clients. Our attorneys assist our clients in all aspects of their business, including the selection and formation of entities under which to operate, preparation and review of agreements, sales, purchases and mergers of businesses, obtaining financing and funding for businesses and employee relations.
In addition, our attorneys provide ongoing counseling relating to business operation, including officer liability, corporate formalities required to maintain liability protection, licensing and trademark issues, shareholder relationships, executive employment, employee vs. independent contractor classifications and employee-incentive plans.
The attorneys at Norton Hammersley Sarasota Law Practice plan for, identify and address state and federal tax issues and represent clients in disputes with the Internal Revenue Service and the Florida Department of Revenue.
For more information regarding Norton Hammersley’s business and tax practice, please contact our Sarasota Business and Tax Attorney John Compton or Sarasota Business and Tax Attorney Chris Fowler of Sarasota Law Practice Norton Hammersley.