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Answer:
The Utah Tax Commission recommends that taxpayers retain their tax records for a minimum of three years. This duration allows taxpayers to maintain records in case of an audit or if they need to provide documentation for various tax-related matters. It's important to note that the statute of limitations for the Utah Tax Commission to assess additional taxes is generally three years from the date the return was filed or the due date of the return, whichever is later.
However, there are instances where taxpayers may want to retain records for a longer period, such as:
Extended Statute of Limitations: If the Utah Tax Commission suspects fraud or if the taxpayer fails to file a return or files a fraudulent return, there is no statute of limitations. In such cases, taxpayers should retain records indefinitely.
Supporting Documentation for Investments or Property: Taxpayers should keep records related to investments, property purchases, and sales for as long as they own the assets and for a period after they dispose of them. These records help calculate gains or losses for tax purposes.
Tax-Related Legal Matters: Taxpayers involved in legal proceedings related to taxes should retain records for the duration of the proceedings and possibly longer, depending on legal requirements.
Business Records: For businesses, the recommended retention period for tax records may be longer than three years, depending on the type of business and applicable regulations.
In summary, while the Utah Tax Commission generally recommends retaining tax records for at least three years, taxpayers may choose to keep records for a longer period, especially for specific types of transactions or in certain circumstances where extended retention is advisable.
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