Just a quick comment on your Records Retention Guidelines.  You state
the following regarding Tax Returns and Backup Documentation:
 
"The IRS has 3 years to audit you from the date you file your taxes;
however, they have 7 years to clear up and correct so called
"Discrepancies.""
 
The IRS does have 3 years after date of filing "or date of payment" to
audit you IIT tax return.  They do not have 7 years to "clear up and
correct so called "Discrepancies".  By statute there is a finite list of
exceptions to the 3 year timeframe.  These include:

*       False Return - Tax may be assessed at any time, without
limitation.
*       Willful attempt to avoid tax - Tax may be assessed at any time,
without limitation.
*       No return - Tax may be assessed at any time, without limitation.
*       Extension by Agreement - Assessment period defined by agreement
between IRS and taxpayer.
*       Tax resulting from changes in certain income or estate tax
credits - No timeframe defined.
*       Tax resulting form distributions or terminations from a life
insurance company - 3 years
*       Termination of private foundation status - Tax may be assessed
at any time, without limitation.
*       Substantial omission of items (generally defined as over/under
reporting of income by 25% - 6 years.

These Limitations of Assessment and Collection are defined in federal
law.  Please see 26 USC 6501.
 
The 7 year requirement for taxes is a myth.  Repeating it doesn't make
it true.
 
Bill Roach, CRM
Enterprise EDMS Coordinator
State of North Dakota
ITD/Records Management
701-328-3589

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