(1)
Taxpayers subject to a tax or determination of value must keep and maintain an
accurate and complete set of permanent books of accounts and records, including
inventories, that are sufficient to establish the correct amount of tax or
value, deductions, credits, exemptions, and other matters required to be shown
for any tax or determination of value.
Taxpayers must keep all documentation that proves the amounts
shown on a tax return or for the determination of value. Copies of tax returns
or determinations of value, schedules, and statements should be retained as
part of the taxpayer's records.
In the absence of sufficient records, the burden of proof shall
remain with the taxpayer to verify amounts shown on a tax return or for the
determination of value.
(2)
Such records and books shall be made available to the Department at a
reasonable time and location. "Reasonable time" shall be considered to be
during normal business hours of the Department. "Reasonable location" shall be
considered to be the taxpayer's place of business or the offices of the
taxpayer's authorized representative. Failing or refusing to maintain such
records and books may be punishable as contempt, as provided in cases of
contempt in circuit court. Also possible are the penalties for negligence,
fraud, intentional disregard of rules and regulations, or failure to file a
return.
(3) The required books or
records must be kept available at all times for inspection by the Department
and must be retained as long as the Department has legal authority to assess
tax to which the books or records pertain. Generally, books and records that
support an item of tax, value, deduction, credit, or exemption on a tax return
should be kept for at least the period of limitations for that return. Usually
this is three years from the date the return was due or three years from the
date on which the return was paid, whichever is later.
Exceptions to this period of limitations include, but are not
limited to the following:
(a) taxes
may be assessed at any time if the taxpayer fails to file a return or files a
false return with the intent to evade tax;
(b) taxes may be assessed within six years on
all tax returns from which more than 25 percent of the taxable base, as stated
in the return, is omitted; and
(c)
if a taxpayer appeals an audit/denial/revocation, which is under examination,
or currently in litigation for a period beyond three years after, records for
all periods in question should be maintained.
Authors: George Mingledorff, Charla
Doucet
Notes
Ala. Admin. Code
r. 810-14-1-.07
Filed with LRS May 20,
1993. Certification filed with LRS July 20, 1993, effective August 24, 1993.
Amended: Filed April 2, 1996, effective May 7,
1996.
Statutory Authority:
Code of Ala.
1975, ยง
40-2A-7(b)(2) b
Act 92-186.
