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



## Meath Lady (7 Mar 2016)

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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## Meath Lady (7 Mar 2016)

Thanks whoever edited title . i was trying to figure out how to do it .


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## Rory_W (7 Mar 2016)

[broken link removed]

*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.


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## Rory_W (7 Mar 2016)

you could consider scanning and keeping the records electronically [broken link removed]


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## Monbretia (7 Mar 2016)

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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## Meath Lady (7 Mar 2016)

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.


Yea thats what I was wondering. But do you keep them forever! or when is long enough.


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## Jon Snow (7 Mar 2016)

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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## Meath Lady (7 Mar 2016)

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...


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


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## Mr Holmes (8 Mar 2016)

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.


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## Bronte (8 Mar 2016)

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.



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.


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## Monbretia (8 Mar 2016)

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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## Bronte (8 Mar 2016)

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.



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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## Mr Holmes (8 Mar 2016)

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.


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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## Bronte (8 Mar 2016)

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.



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.


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## Mr Holmes (8 Mar 2016)

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.


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## Cervelo (8 Mar 2016)

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.



Would you happen to know why it went from 1.2m to 50k, was the Revenue bill completely off the wall ??


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## Monbretia (8 Mar 2016)

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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## Monbretia (8 Mar 2016)

Several professionals were hired also to help with the whole thing so they couldn't have done it all on their own.


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## Gordon Gekko (8 Mar 2016)

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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## Jon Snow (8 Mar 2016)

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.


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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## Gordon Gekko (8 Mar 2016)

Jon Snow said:


> 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...!



You're being pedantic...this isn't a tax lecture! For the purposes of this discussion, they can't ask you. How you win the argument that they can't ask you is a separate issue.


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## Meath Lady (8 Mar 2016)

Gordon Gekko said:


> You're being pedantic...this isn't a tax lecture! For the purposes of this discussion, they can't ask you. How you win the argument that they can't ask you is a separate issue.


Thanks  everyone . Interesting discussion.


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## Jon Snow (8 Mar 2016)

Gordon Gekko said:


> You're being pedantic...this isn't a tax lecture! For the purposes of this discussion, they can't ask you. How you win the argument that they can't ask you is a separate issue.



Sorry if it seems pedantic but it's an important distinction I feel, to make sure that people don't have the impression that they get to unilaterally decide what / when Revenue can ask.

But equally, the onus is on Revenue to establish "reasonable grounds" to believe there may have been fraud or neglect.


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## Gordon Gekko (8 Mar 2016)

Jon Snow said:


> Sorry if it seems pedantic but it's an important distinction I feel, to make sure that people don't have the impression that they get to unilaterally decide what / when Revenue can ask.
> 
> But equally, the onus is on Revenue to establish "reasonable grounds" to believe there may have been fraud or neglect.



The thing is that they do get to do that. But most people don't know the rules. A taxpayer would be right to say "you cannot ask me that" in certain circumstances. Although it's an advert for having a good advisor as I'm sure you'd agree...someone to tell Revenue that they have no right to ask a particular question or to put it up to them by saying "see you in front of the AC!"


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## Sophrosyne (8 Mar 2016)

Meath Lady said:


> 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.


 
As a fellow hoarder, I think Rory_W's suggestion might be best for you.



Rory_W said:


> you could consider scanning and keeping the records electronically [broken link removed]


 
You won't have the clutter, but you will still have the records.

Besides, you might want to look back at records for a purpose other than taxes.


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## Bronte (9 Mar 2016)

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*.



Woah your horses there, that's exceedingly appalling advice on how to handle Revenue.  In fact it's downright dangerous as you'd likely upset a minion and get the full wrath of said minions power.


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## T McGibney (9 Mar 2016)

Bronte said:


> Woah your horses there, that's exceedingly appalling advice on how to handle Revenue.  In fact it's downright dangerous as you'd likely upset a minion and get the full wrath of said minions power.



Reminding taxpayers that they have rights too is hardly appalling advice in any context.


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## Bronte (9 Mar 2016)

Ok Tommy no way would you suggest a client say that to revenue.  You might softely softely as an accountant point out very gently gently to revenue staff that there is no grounds but even that could go the wrong way.  That's my point.  If they want to go after you they will, grounds or not. 

By the way are you in the habit of telling Revenue you're not replying to them because they have no basis for asking a question?


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## T McGibney (9 Mar 2016)

Bronte said:


> Ok Tommy no way would you suggest a client say that to revenue.  You might softely softely as an accountant point out very gently gently to revenue staff that there is no grounds.



Sorry, you're wrong. As a professional with an obligation to represent my customers in an adversarial forum, I will say whatever I need to say.  I will also advise my customers on how they may choose to respond to a Revenue information request, including "get stuffed" if I consider that an appropriate response in a given context.



Bronte said:


> By the way are you in the habit of telling Revenue you're not replying to them because they have no basis for asking a question?



"in the habit of"?

I frankly don't like the loaded nature of this question.  But see my comment above.


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## Gordon Gekko (9 Mar 2016)

Bronte said:


> Ok Tommy no way would you suggest a client say that to revenue.  You might softely softely as an accountant point out very gently gently to revenue staff that there is no grounds but even that could go the wrong way.  That's my point.  If they want to go after you they will, grounds or not.
> 
> By the way are you in the habit of telling Revenue you're not replying to them because they have no basis for asking a question?



The law is there for a reason. There are strict rules regarding what Revenue can do and can't do. Taxpayers or their advisors absolutely should insist that rights under the law are observed and point out errors. These people are not gods and we don't live in a fascist state.


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## Gordon Gekko (9 Mar 2016)

Bronte, if Revenue ask you a question that they aren't permitted to ask you, do you answer them anyway?!

A good advisor represents his/her client to the best of their ability, and to be frank takes no nonsense from Revenue.


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## Bronte (10 Mar 2016)

Ok GG and Tommy, but I take that with a pinch of salt when we have a poster on here who took seven years to negotiate and he had apparently hired professionals.  And he was in the right, and still it took years.  We don't' know the ins and outs but the poster mentioned revenue hadn't a clue (basically). 

Anyway I understand about 'pointing out' to revenue one's rights, but telling them to 'sling their hook' might not work and it also depends on who you are dealing with.  I do realise GG that revenue are not Gods.  But by God are they powerful.  If they want to be.  And yes I've been party to negotiations with revenue.  Long time ago now.  I've also experienced their utter incompetence.


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## T McGibney (10 Mar 2016)

Bronte said:


> Ok GG and Tommy, but I take that with a pinch of salt when we have a poster on here who took seven years to negotiate and he had apparently hired professionals.  And he was in the right, and still it took years.  We don't' know the ins and outs but the poster mentioned revenue hadn't a clue (basically).


Personally I can only speak for myself, and my own approach, here.  Its impossible to meaningfully benchmark this against with anecdotes told on AAM where we don't have the first notion whether we have the full story or whether the experience outlined is factual.

Having good professional representation won't on its own insulate a taxpayer from having a Revenue Audit or similar enquiry drag on interminably. But it should help the taxpayer to assert his/her rights if attempts are made to override these.


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## Bronte (10 Mar 2016)

T McGibney said:


> Having good professional representation won't on its own insulate a taxpayer from having a Revenue Audit or similar enquiry drag on interminably. But it should help the taxpayer to assert his/her rights if attempts are made to override these.



Agreed. And word 'should' noted.

How long should clients keep records?


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## T McGibney (11 Mar 2016)

Bronte said:


> How long should clients keep records?



Forever, if they can manage it. Especially for key documents like financial statements, bank statements, tax returns & computations.


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## Bronte (11 Mar 2016)

Good Tommy, I got something right.  It's also a good idea to write oneself notes, I do in my rental excels now, to tell me why this or that bank transaction was abnormal or whatever was odd, it's amazing how you can forget things as time goes by.


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## Monbretia (11 Mar 2016)

At least it's not just me!  I have everything back to my first pay slip and like Bronte notes written everywhere on statements etc.   Dumped some old utility bills but have everything else imaginable.


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## Black Sheep (11 Mar 2016)

I'm in the forever camp also or at least I thought I was until recently when I got into a general de-cluttering mode and am now going the 7 year rule route. The shredder is on overtime at the moment.


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## Monbretia (11 Mar 2016)

Actually I'm not even keeping them because of anything to do with Revenue, was PAYE until few years ago, I just like to have them


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