The IRS requires paid tax preparers to keep a completed copy of returns or claim for refund; or retain some type of record, or list, which includes the taxpayer's name, identification number, and tax year. How long must these records be retained and available for inspection?

Question

Two years following the close of the tax return period in which the claim for refund was requested.
Three years following the close of the tax return period in which the claim for refund was requested.
Seven years following the close of the tax return period in which the claim for refund was requested.
There is no limit to how long these records are kept.

Answer 1

Paid tax preparers are required to retain a completed copy of tax returns or claims for refund for three years following the close of the tax return period in which the claim for refund was requested. This period aligns with the general statute of limitations for audits by the IRS. Therefore, the correct answer is:

Three years following the close of the tax return period in which the claim for refund was requested.