(b) A person must retain the books and records described in subsection (a), and any state or federal tax return that the person has filed:

1. (1) for an unlimited period, if the person fails to file a return or receives notice from the department that the person has filed a suspected fraudulent return, or an unsigned or substantially blank return;
2. (2) in all other cases, for a period of at least three (3) years after the date the final payment of the particular tax liability was due, or for a period during which a judicial proceeding or appeal related to a listed tax is pending, whichever is later, unless after an audit, the department consents to earlier destruction; or
3. (3) if the limitation on assessments provided in section 2 of this chapter is extended beyond three (3) years for a particular tax liability, the person must retain the books and records until the assessment period is over, or for a period during which a judicial proceeding or appeal related to a listed tax is pending, whichever is later.

(e) The failure of a person to keep books and records in the ordinary course of business shall be considered for purposes of determining the weight of the evidence as it relates to the person's liability for a listed tax, and not for purposes of the admissibility of the evidence. In examining the evidence, the department and the courts may take into account any federal law regarding the probative value of such evidence.

As added by Acts 1980, P.L.61, SEC.1. Amended by P.L.6-1987, SEC.11; P.L.71-1993, SEC.18; P.L.234-2019, SEC.31.