How long must a taxpayer maintain records for tax purposes?

The correct duration for which a taxpayer must maintain records for tax purposes is three years from the date the tax return was filed. This timeframe is established by the IRS and is based on the general statute of limitations for tax audits and assessments.

The three-year period allows the IRS to review a taxpayer's return and any claims for refunds. If, for instance, the IRS decides to audit an individual’s return, they must generally do so within this three-year window. This timeframe also accounts for any adjustments that a taxpayer may need to make to their return and helps ensure that adequate documentation is available for both the taxpayer and the IRS.

It’s important to note that there are certain circumstances that may require longer retention periods. For example, if there is any indication of fraud, or if a taxpayer fails to file a return, the IRS may look back further than three years. However, in standard situations, maintaining records for three years is sufficient to comply with IRS requirements.