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You must be able to produce receipts, invoices, canceled checks or bank records that support all expense items. You should also keep sales slips, invoices or bank records to support all income items. These records should be retained for at least 10 years after they have expired.

Section 286 of the Corporations Act requires financial records to be kept for at least seven years after the transactions covered by the records are complete.

Accounting Systems Other records, such as payable and receivable ledgers, bank reconciliations, bank statements, and cash and charge slips, and any other supporting documents should be retained for seven years.

How far back can the IRS go for unfiled taxes? The IRS can go back six years to audit and assess additional taxes, penalties, and interest for unfiled taxes. However, there is no statute of limitations if you failed to file a tax return or if the IRS suspects you committed fraud.

These factors include the action, expense and event recorded in the document. The IRS generally suggests taxpayers keep records for three years.

Three years from the filing date?or the due date, if later?for most tax returns. four years after the tax becomes due?or gets paid, if later?for employment tax returns. six years from the filing date?or the due date, if later?for tax returns that underreport gross income by more than 25%

2. Six Years for Large Understatements of Income. The statute of limitations is six years if your return includes a ?substantial understatement of income.? Generally, this means that you have left off more than 25 percent of your gross income.