Certain tax records, though, should be kept much longer than indicated above. Records substantiating the cost basis of property that could eventually be sold, such as fixed assets and investments, should be retained based on the record retention period for the year the property is sold. Tax returns, results of an audit by IRS and state, and business ledgers and financial statements should normally be kept indefinitely.
It may be necessary to hold onto some records longer for non-tax reasons. For example, insurance policies, leases, real estate closing statements, employment records, and other legal documents might need to be retained longer than needed for IRS purposes.