If you're facing an IRS audit, your best line of defense is whatever tax documentation you've saved. Unfortunately, accounting firms rarely store clients' tax records for more than three years. What should you save, and for how long? Here's the advice of William J. Goldberg, national director for personal financial planning for KPMG Peat Marwick in Houston:

* Tax returns. A business owner should keep indefinitely one copy of each year's corporate return and one copy of his or her family's personal return. The burden of proof is almost always on the taxpayer if the IRS alleges tax fraud -- and there's no statute of limitations to justify discarding records.

* Net-operating-loss (NOL) documentation. Keep these records (relevant tax forms as well as any business records documenting losses) for 18 years, to cover the 15-year term during which NOLs can potentially be carried forward, plus the IRS's 3-year statute of limitations on NOLs.

* Bad debts. Save records (such as copies of all collection attempts) for 7 years, since that's how long the IRS has to challenge the credit.

For details on other statutes of limitations relating to your tax records, check with your accountant. Then, says Goldberg, "it makes the best sense to keep a single copy of each tax document in a fire-resistant storage area."

-- Jill Andresky Fraser

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If you want to clarify a tax point, here's a low-cost option: Advantax, a federal-tax-advice telephone service staffed by CPAs, operating seven days a week. At $3 a minute, Advantax is a bargain for quick questions (900-933-3004). Or take your chances with the IRS's tax hot line (800-829-1040).