If you follow the news, you’ve probably read about the Department of Government Efficiency and its incursions into the seemingly bottomless trove of federal data, including potentially sensitive tax and Social Security records.
Elon Musk’s cost-cutting campaign has stoked fears about the data itself: that sensitive records might be mishandled, copied, leaked or lost. The concurrent mass layoffs of government workers potentially leave fewer trained hands available to safeguard the records. Some security experts warn that outside hackers could exploit the situation to access the data for their own nefarious use.
Thankfully, none of the worst-case scenarios seems to have played out with America’s data.
The Trump administration reportedly has agreed not to access personalized tax data. DOGE agents have "read-only" access to Social Security records, which means "DOGE personnel CANNOT make changes to agency systems, benefit payments, or other information," said Lee Dudek, acting Social Security commissioner, in a statement.
“The risks of the government losing your records altogether or misplacing them is probably pretty slim,” said Chuck Bell, programs director for advocacy at Consumer Reports.
Still, the DOGE data dive comes at a time when data breaches seem to be on the rise. There’s no reason, data experts say, to assume your federal data is any safer than records held by health care companies and banks.
Here, then, are some expert tips on the federal records that you should track down, download and save, and for how long.
Tax returns
Common wisdom dictates you should keep your tax returns for at least seven years, if not forever. These crucial records are probably already in your files: Just make sure you don’t toss them.
“They serve as a historical record and may be needed for financial transactions, proving compliance, filing an amendment, long-term financial planning, loan applications and even verifying Social Security benefits,” said Mark Gallegos, a CPA in Chicago.
Why seven years? The IRS can audit you for any reason for three years from the date you filed your return, said Paul Mendelsohn, a CPA in Livingston, New Jersey. The agency has up to six years to audit a return over a major issue, such as unreported income. The seventh year “provides a buffer,” Gallegos said.
Tax supporting documents
You should hold on to the documents you filed with your tax return or used to prepare it, including W-2 forms, 1099s, receipts and expense records, for at least three years, and ideally for seven, the CPAs said.
But the seven-year rule comes from an age of paper files and cluttered basements. If your records are electronic, and clutter isn’t an issue, then “I don’t see any harm in keeping electronic tax records indefinitely, assuming they aren’t vulnerable to hackers,” said Adam Brewer, a tax attorney in San Diego.