IRS Question

Factual Questions
1

I need to find out how far the IRS can go back, time-wise, into your past.

I realize you are not my attorney, accountant, etc. I am letting pros handle this. But I need this information for a friend, and he wants the info today.

Any information would appreciated!

2

IANAA but my accountant tells me to keep 7 years of documents.

I believe that the ‘statute of limitations’ if that is the correct term, is 6 years.

Edit…I seem to be incorrect. It may be 10 years according to this: http://ezinearticles.com/?IRS-Statute-of-Limitations:-Do-Taxes-Ever-Expire?&id=52707

3

IANAL but my understanding is that there is no statute of limitations on fraud.

4

I don’t think we’re talking about fraud here. I was just discussing some recent IRS problems with a friend of mine, who’s having IRS problems of his own. And he asked me how far they can go back into your records, and I said I didn’t know. He asked me to find out, and I owe him, big time, so I’m checking.

MrFloppy, thanks!

5

This is a very rough generalization:

  1. If you have filed a return, the IRS has three years to audit it with regard to claimed deductions, etc.

  2. If you have filed a return but failed to report some of your income (inadvertantly–see item 3 re fraud), the IRS has 7 years to audit.

  3. No time limit on review in the event of fraud–and failing to file for the purposes of avoiding payment of taxes (or purposefully failing to report income) is going to be fraud.

BUT anybody who fails to file who would have been entitiled to a refund was not avoiding taxes by failing to file so 3 does not apply in that case.

Rough rule of thumb only.

6

What everyone else said.

They can go back 10 years on most cases, but usually will only want 6. For instance, if your friend hasn’t filed their taxes in 20 years and wants to know what he needs to file, the answer is generally the last 6 years.

If your friend filed his taxes in 1998 but the IRS is showing he still owes them $15,000 or something, well then the statute is almost up and they should have to dismiss the debt*.

A little more info on his particular situation might help with answers and such.

*“Should” being the operative word. I’ve seen some weird shit. One time, an IRS agent had a little old lady sign a hand written note saying she gave up her rights and agreed to terminate the statute. Um, not so much. The Congress critters did not like that much at all.