How long must an ERO retain Form 8879?

The correct retention period for Form 8879 is three years from the due date of the return or the date the IRS receives the return, whichever is later. This requirement aligns with the general IRS guidelines on document retention for tax returns, which typically mandate keeping records for at least three years. This period is significant because it provides enough time for the IRS to audit returns and ensure compliance with tax laws.

Form 8879, the IRS e-file Signature Authorization, serves as a signature for e-filing tax returns, and maintaining it for this duration ensures that the Electronic Return Originator (ERO) has evidence of taxpayer consent in case of any inquiries or audits by the IRS. Retaining the form helps protect both the ERO and the taxpayer in compliance matters.

Other options suggest either a shorter or a longer retention period than what is mandated, which would not satisfy the regulatory requirements set forth by the IRS. Choosing the correct period is crucial for EROs to avoid potential issues related to tax audits.