The normal federal statute of limitations gives the IRS only three years to audit you and your business, starting from the later of the due date (March 17, 2014 for Sub-S entities, April 15, 2014 for sole proprietorships, Schedule C) or the date you actually file a business tax return (note that if you never file a return for a given tax year, all bets are off — you can be audited FOREVER!). So three years is the absolute minimum period for business tax record retention. However for serious tax misdeeds, the IRS can go back six years — and for outright fraud, it can go back forever.
State tax agencies can inspect your business tax records as well. Some state statutes of limitations for auditing are longer than the IRS’s (PA is three years generally). Conventional wisdom is to keep your regular tax-related documents — receipts, invoices, bank statements — for six years after filing your tax return.
Asset records on equipment such as vehicles, office equipment, tools and real estate, should be kept for six years AFTER the asset has been disposed of. For example, if you purchase a building in 1999 and sell it in 2010, you should keep the documents relating to the building from 1999 on until six years after the date of the sale — 2016. This is the “audit safety” period.