How long is it neceesary to keep tax documents in case of Revenue audit?

M

Meath Lady

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Hi. Hubby is self employed with rental income also. I am a Paye worker.I am a complete hoarder. Trying to do a tidy up and clear out at home. Filing cabinet and study full with paperwork, accounts, statements , invoices, tenancy agreements dating back 15 years or more. Am I mad to be keeping these in case of an audit or should i just keep six years accounts and relevant papers. What would be the implications if I didnt have something needed if audited. Tax returns completed by accountant each year.
 
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How long must I keep records?
You must keep your records for a period of six years unless your Inspector of Taxes advises you otherwise.
 
But if you're audited can't they go back further than six years? If you haven't the back up documentation then it could be hard to argue your case if needs be.

While working in the bank maybe 10yrs ago (so roughly 2006) I had a customer who was being audited and needed copies of all statements going back to 1991, cost him a fortune.
 
Monbretia said:
But if you're audited can't they go back further than six years? If you haven't the back up documentation then it could be hard to argue your case if needs be.

While working in the bank maybe 10yrs ago (so roughly 2006) I had a customer who was being audited and needed copies of all statements going back to 1991, cost him a fortune.
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Yea thats what I was wondering. But do you keep them forever! or when is long enough.
 
I think a clever person would keep a record that would evidence their innocence for as long as possible, and get rid of a record that might evidence wrongdoing as quickly as possible...
 
Jon Snow said:
I think a clever person would keep a record that would evidence their innocence for as long as possible, and get rid of a record that might evidence wrongdoing as quickly as possible...
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Ok got the picture. No wrong doing. just lots of paperwork and wondering how necessary it is to keep. however will probjust keep it all to be on the safe side. Thanks
 
I would advise you to keep all necessary documentation for a rolling 6 year period. If you have had a full audit by revenue, they are within their rights to demand that you keep such documentation for a longer period as specified by them.
 
Monbretia said:
While working in the bank maybe 10yrs ago (so roughly 2006) I had a customer who was being audited and needed copies of all statements going back to 1991, cost him a fortune.
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My old boss was audited in relation to rental income amongst other things, went back forever, his advice to me still stands to this day, keep all records forever. I have mine in folders in plastic boxes stored in my garage. As for my boss, about 2 million in taxes and penalties.
 
That previous customer was hit with bill for 1.2m 10yrs ago, appealed as felt it was totally wrong and unfair, appeals process took 7 yrs to get to oral hearing with Revenue. Revenue wanted to settle just before hearing, guy wanted his day out at that stage, anyone assessment reduced to 50k but took over his life for that 7 yrs.
 
Monbretia said:
That previous customer was hit with bill for 1.2m 10yrs ago, appealed as felt it was totally wrong and unfair, appeals process took 7 yrs to get to oral hearing with Revenue. Revenue wanted to settle just before hearing, guy wanted his day out at that stage, anyone assessment reduced to 50k but took over his life for that 7 yrs.
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My goodness from 1.2 m to 50K. But seven years of unbearable stress. I didn't realise it could take that long.
 
Bronte said:
My goodness from 1.2 m to 50K. But seven years of unbearable stress. I didn't realise it could take that long.
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I would live with that stress if it save me over a million euro and I knew that ultimately I would be vindicated.
 
Mr Holmes said:
I would live with that stress if it save me over a million euro and I knew that ultimately I would be vindicated.
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I understand that, but it can break a man, that kind of stress. Because not only will one be dealing with this, but also a business, a spouse, a family and just life. I have seen people who have gone through this and it is not a pretty sight.
 
Yes, it depends on how you handle stress to be sure, a bit like a persons outlook, is the glass half full or half empty for example.
 
Monbretia said:
That previous customer was hit with bill for 1.2m 10yrs ago, appealed as felt it was totally wrong and unfair, appeals process took 7 yrs to get to oral hearing with Revenue. Revenue wanted to settle just before hearing, guy wanted his day out at that stage, anyone assessment reduced to 50k but took over his life for that 7 yrs.
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Would you happen to know why it went from 1.2m to 50k, was the Revenue bill completely off the wall ??
 
I don't know the details but there were a lot of duplications and errors in the intial calculations based on not understanding the bank deposit account rollover systems.
 
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Several professionals were hired also to help with the whole thing so they couldn't have done it all on their own.
 
You are obliged to retain the records for six years, which in practice means seven years because (for example) your 2015 tax return is submitted in 2016.

Revenue cannot ask you about earlier years unless they can prove that they suspect "fraud or neglect".

So if, for example, Revenue ask you about your 2008 tax return and they have no grounds to suspect you of fraud or neglect, you are entitled to tell them that you will not be helping them.
 
Gordon Gekko said:
You are obliged to retain the records for six years, which in practice means seven years because (for example) your 2015 tax return is submitted in 2016.

Revenue cannot ask you about earlier years unless they can prove that they suspect "fraud or neglect".

So if, for example, Revenue ask you about your 2008 tax return and they have no grounds to suspect you of fraud or neglect, you are entitled to tell them that you will not be helping them.
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Not exactly, you're entitled to appeal to the appeal commissioners against revenue making an enquiry out of time. The appeal commissioner will then decide whether or not you'll be helping them...!
 
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