No, not a new Texas poker sensation to separate you from your money. This is Judge Cary Douglas (“C-Doug”) Pugh’s advice to Gerald A. Beacom and Jean A. Beacom, GT. C. Memo. 2026-65, filed 8/11/26. The kerfuffle concerns an AMIT carryforward Gerald was taking that stretched back to 1999 or maybe sometime through 2005, he couldn’t recollect exactly; “(understandably, given the passage of time)” says Judge C-Doug Pugh. T. C. Memo. 2025-65, at p. 2.

But that doesn’t help Gerald, even though he says he lost his old records in a flood.

“Petitioners defend their lack of documentation by claiming that IRS guidance requires taxpayers to retain prior year returns for a maximum of seven years. Internal Revenue Serv., Publication 17: Your Federal Income Tax 17–18 (Dec. 16, 2021), https://www.irs.gov/pub/irs-prior/p17–2021.pdf (prescribing various periods for retaining records, including seven years for losses from worthless securities and bad debt deductions); see § 6511(b). They misread that guidance. It requires taxpayers to retain documentation supporting the items reported on a return for seven years. Petitioners should have maintained records supporting their claimed AMT credit for seven years from the date of the return on which they applied the credit, not seven years from the date of the return when they first paid the AMT. That is, petitioners were required to retain, as evidence of their eligibility for the AMT credit in tax year 2021, records (such as their prior returns) documenting the source of the AMT credit (and its prior utilization, if any) for seven years from 2021, not seven years from 1999 or 2000.” T. C. Memo. 2026-65, at p. 6. The flood took place years before 2021 (year at issue).