Retention of documents for Tax Purposes
- Thread starter monagt
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T McGibney
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Revenue require records to be retained for 7 years. As an accountant, I advise clients to retain tax and associated records for life.
T McGibney
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Holding onto reams of information for several decades isnt easy, unless the data can be digitized, but in a context where Revenue can re-open case files after 20-30 years (as happened with the various historic enquiry programmes of recent times), I consider it a prudent course of action.
mandelbrot
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Unless of course it suits one to have no records older than the statutory limit...
Then the revenue can estimate a liability using their records and its up to you to disprove it.
Keep all financial/taxation records for life, It won't take up that much space.
mandelbrot
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Unless of course one feels that Revenue are likely to underestimate rather than overestimate the liability, in the absence of sufficient records...
Clearly I'm joking - this sort of stuff is exactly what attics are for aren't they?!
T McGibney
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The joke didn't seem that funny to the thousands of elderly people who, 5 or 6 years ago, found themselves subjected to Revenue investigation of their own or their (living or deceased) spouses' tax and business affairs stretching back decades, and faced with ultimatums to settle apparent (but unproven) liabilities within a matter of weeks or else face prosecution.
In my experience, those who had retained their tax and accounts records for past years were in a far better position to defend themselves against Revenue compared to their counterparts who had lost or disposed of their records in the meantime.
In my experience, those who had retained their tax and accounts records for past years were in a far better position to defend themselves against Revenue compared to their counterparts who had lost or disposed of their records in the meantime.
No they cannot.
Except for cases of fraud or neglect, Revenue are prohibited from raising or amending an assessment on an individual after four years from the end of the year during which the individual's income tax return was submitted.
Legally, persons are obliged to retain records for six years.
Individuals and companies should be firm with Revenue when enquiries are assessments are raised outside the statutory time limits.
Obviously, "dodgy" cases such as bogus non resident accounts and sham offshore trusts don't qualify for the above treatment.
In such circumstances Revenue would have to prove that there was fraud or neglect. I don't have the legislation in front of me but Revenue are restricted from even raising queries in relation to the historic affairs of compliant taxpayers. The time limit for raising queries is broadly similar to the "4 year rule". The Inspector would have to demonstrate the basis for asking about (say) 1999. That would be for example demonstrable fraud or neglect in (say) subsequent years where the same trading activities were undertaken or third party evidence (e.g. a taxpayer's name showing up on a list of bogus non resident account holders).
A compliant taxpayer can basically tell Revenue to get lost when queries about bygone years arise.