Men are governed by laws not by men. Moreover, almost every aspect of your life is invaded by the laws of your country and local jurisdiction. From the disposition your properties, to the expected norms of society and eventually to the manner of paying tax contributions, no one is considered above the law.
For this reason, there are ordinances with which you need to comply and consider in order to adhere to what the law expects of you. Tax laws may seem complicated depending on the state you are in. Tampa tax attorney may have different legal advice compared to a tax attorney in China. This is because the tax system of different countries are diverse.
Tax law, which is a codified system of laws that covers government levies on certain business or economic transactions, imposes taxes. These taxes are delivered back to taxpayers by way of government projects. If you failed to do your duty as a taxpayer, you will be penalized.
Tax law is a sub-discipline in law schools. They are consultative in nature; however, they can be used in litigation purposes. Tax law is crucial in business as well as personal planning matters. If you are facing an Internal Revenue Services (IRS) problem, you need a tax attorney to assist and defend you.
Tax laws demand that you keep tax records for the government to check. Said records can also serve as proof of your compliance with the tax laws. Nonetheless, many taxpayers have no idea about what records to keep and how long to keep them.
By tax records, it means tax returns and several documents that support your returns like bank statements, receipts, 1099s, and more. These documents are important to fend off the IRS. Your tax attorney will tell you what these records are and how important they are.
However, to make it easy for you, here is a quick review:
- Tax returns contain the tax contribution that a taxpayer has to pay.
- They serve as a good proof that you have paid your taxes.
- They have to be kept indefinitely.
- IRS is known for misplacing and losing tax returns so be sure that yours can be found to circumvent a nasty audit.
- IRS receives millions of tax returns every three months.
- Lost returns can be copnsidered an inevitablen occurrence.
- So keep every single tax return that comes into your possession.
If you are filing your tax returns electronically, better get copies from the filing company. By the way, they are required by law to give you copies. Supporting documents, on the other hand, should be kept for a period of 6 years from the filing of the returns. However, this period can be extended in special cases.
Tax records are vital in case of divorce proceedings. Moreover, it is best to save the necessary documents like financial documents, tax returns, supporting documents, and credit reports, not just for divorce purposes but for other circumstances as well.
If you don’t keep your tax records, you should anticipate involvement with a nightmarish chapter in your life. If you intend to keep your tax records in one place for easy finding, you can purchase a filing cabinet for said purpose; and if you are lucky enough, you will never need your tax records. However, if you belong to the unlucky few who are audited, tax records will be your saving grace to prove your compliance to tax laws.