How far back does the IRS keep tax returns?
How far back does the IRS keep our tax returns? I want to reconstruct the deductible/non-deductible portions of my IRA contributions. I need to go back to the 1986-1995 period. Anyone know? Also, what is the form to submit? Thanks all. This is quite an accomplished forum.
Permalink Submitted by Anonymous (not verified) on Wed, 2009-06-24 23:27
This is going to be difficult. I don’t think the IRS will be of much assistance in providing you with past returns. It may be 3-7 years that they can look at your returns for errors and audits. You are looking back 23 years! I don’t know for sure, but you may want to contact an IRS office about what they are willing to dig up for you.
Your issue breaks down in the following way:
Did YOU keep returns or any records of filling out the 8606 for every year you did not deduct. If no, any of these contributions will be considered pre-tax and you will one day be double taxed. (even if you did not deduct, you failed to track it). The only way to record these as “non-deductible” is to refile the 8606 for those years and pay a $50 penality for every year you forgot. This might be worth it, since you could have some significant after-tax basis, but how can anyone prove anything to anyone here…..Sorry I can not really advise anything here.
Bottom line, the 8606 gives the ability to correct past years with a small penalty.
Source: bottom page 5 http://www.irs.gov/pub/irs-pdf/i8606.pdf
pmk
Permalink Submitted by Alan Spross on Wed, 2009-06-24 23:39
Actually, the IRS has been waiving the $50 penalty for retroactive 8606 filings for years now, but they have hinted this might not go on forever. However, if you report a non deductible contribution in a year you actually deducted it, then they may go after you.
It appears that the IRS charges a fee for a full copy of the return, but not for a transcript which would show the 5498 showing the contributions. But you need to compare the 5498 with the return or the line on the transcript where the deduction would be taken to determine if you are justified claiming the basis at this time. The instructions for the 4506T are attached, but the bad news here is that only 10 years are available per the Inst. You might consider asking for the free 10 years of transcript info, at least that gets you back to where the max contribution was only $2,000.
http://www.irs.gov/pub/irs-pdf/f4506t.pdf
Permalink Submitted by Bruce Steiner on Thu, 2009-06-25 02:46
You may have or be able to get statements for your IRAs that would show your contributions, or you may have records for your checking account that might show your contributions. And you would likely remember whether you were a participant in a plan, or what your income was, for prior years, which would tell you whether your contributions were deductible.
My guess is not that many people made nondeductible contributions to their IRAs, though every now and then I see someone who has made nondeductible contributions.
Permalink Submitted by Alan Spross on Thu, 2009-06-25 03:04
Yes, Bruce’s post brings up the fact that other potential sources of information are your IRA custodians, particularly if you have been with your current one over most of this period. They could establish whether you made a contribution and how much, but you would need your tax records to determine if you deducted the contributions. If you have been using professional tax preparers, they can often dig through their records and provide this information, but it could cost you. A professional software program either produces an 8606 or applies the deduction. SInce the 8606 forms are cumulative, once you locate one that you think is correct, you do not have to research back any farther. The first year you possibly could have made a non deductible contribution was 1987.