It's a common practice to recommend that taxpayers keep their tax filing information for three or seven years. A taxpayer has up to three years after the due date of a tax return to file an amended return if new information or corrections come about. The IRS also has three years after the due date of the tax return to notify you of a correction to your tax return.

The seven year rule of thumb comes into play because of the tax laws related to cases of fraud. If the IRS believes you've committed tax fraud, they have seven years after the due date of the tax return to go after you.

Because of these two situations, taxpayers mistakenly think it's only necessary to keep their tax documentation for three or seven years. But there's a reason to keep your tax documents forever. The three and seven year statute of limitations only start running if you actually file a tax return. If you file nothing for a year, the IRS can go after you for the taxes forever.

You're thinking this doesn't apply to you, since you've filed all your tax returns. But what if they IRS has no record of you filing a return from 17 years ago? Under the tax laws, they can still go after you. It's your burden to prove that you in fact filed, and you couldn't prove that unless you still had your tax documentation. This doesn't happen often, but the IRS does lose tax returns and a taxpayer can fall through the cracks for years. It's not hard to keep your tax papers stored somewhere, so it's wise to do it, even if there's only the slightest chance that the IRS might come after you.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Income tax information is generally private, but in the case of presidential candidates, it's not. Their invasion of privacy makes for hours of fun for those of us interested in how much money others make. Here's how the numbers shook out for 2007 tax returns:

John McCain:
Adjusted gross income $386,527
Charitable contributions $105,467
Federal income tax $118,660
Actual tax return here (large file).

Other interesting information: McCain gave $105,467 to charity, which was 27% of his income. He also made just over $110,000 from books he's written.

There's a very simple rule at the Internal Revenue Service: Employees are only supposed to look at tax records which are required to do their jobs. They're not supposed to look at anyone else's records. Not their neighbors. Not the ex-wife. Not a celebrity. Those records are off-limits.

The Treasury Inspector General has reported that in fiscal 2007, they opened 521 investigations related to employees snooping into tax records. In fiscal 2006, there were 448 investigations opened. That's a 16% increase in fiscal 2007.

The number of "adverse administrative actions" against IRS employees has gone up too, more than doubling between 2006 and 2007.

"The numbers aren't so bad," you might think. Guess again. Those are only the people who actually got caught snooping. Imagine how many other employees are snooping too. The IRS says the investigations involved fewer than 1% of employees, but as a taxpayer, that doesn't make me feel any better.

Of any agency that should be protecting our personal information it should be the IRS. I don't care if the number of employees accessing information without authorization is low. It still bothers me, particularly when identity theft is such a concern.

Forensic accountant Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations through her company, Sequence Inc. Forensic Accounting. The Association of Certified Fraud Examiners honored Tracy as the 2007 winner of the prestigious Hubbard Award and her first book, Essentials of Corporate Fraud, will be on bookshelves in March 2008.

You need your personal taxes done and they're not that complex, so you think you'll just run right over to H&R Block, Jackson Hewitt, or some other tax preparation franchise. It's easy and they must be good or they wouldn't have so many locations and be in business so long, right?

Wrong. The fact of the matter is that you're taking a big risk if you have your taxes done at one of the large tax return sweatshops or a similar smaller service. These companies have a few major drawbacks that most consumers are unaware of:

The prices they charge are generally too high. Even the simplest of tax returns can cost you well over $100, and that type of fee is just too much. Add in some things like a rental property or an in-home business, and watch your tab for the tax return run up fast.