This is a question that almost everyone has, but to which few can supply a satisfactory answer. Here are some guidelines.

• The government has three years to initiate an audit proceeding. However, they can go back as far as six years under certain circumstances. So most accountants recommend that you hold on to six years' worth of filed returns. 
• Since we haven't filed 2008 taxes yet, you should still have your tax records for 2002 through 2007, which is six years. Once you file your 2008 taxes, you can shred and discard your 2002 return and related records (except for the exceptions listed below).
• If you file a return that is false or fraudulent, or if you neglect to file a return, then the IRS has no time limit. Luckily, for most of us, that isn't the case.

Certain financial records should be saved even if you are discarding the tax return. These include:

• How much you paid for your investments, such as stocks, bonds, and mutual fund shares. You will need that information when you sell these investments so that you can report the appropriate gain or loss on your tax return.
•  What you paid for your home, and how much you spent on any improvements.
• If you have business or rental property, save your returns and records as long as possible in case the IRS disputes your depreciation methods.

When you are ready to discard your old tax records, remember to use a shredder! Papers with social security numbers and financial account information on them should never be put in the trash.