ASSESSMENT,
COLLECTION AND REFUND LIMITATIONS
The
various Statutes of Limitations herein referred to
relate to IRS provisions, only. State rules vary
and are under the jurisdictional authority of the
particular state. If you have questions
regarding limits that apply to a specific state our tax
research platform provides the links to all State
Departments of Revenue. tax
ASSESSMENTS
The
IRS generally has 3 years from the time the that an
original return is filed to assess additional taxes.
However, if there is a substantial
understatement of gross income reported on a return
defined as an understatement in excess of 25% of the
amount of gross income stated on the return, the time
for assessment is extended to 6 years.
The
time for assessment does not toll for 150 days after a
Notice of Tax Deficiency is issued. If the
taxpayer signs a waiver after the issuance of a Notice
of Deficiency the period of time that the Statute does
not toll is reduced to 60 days.
There
is no statute of limitations on assessments when, a
taxpayer filed a fraudulent or false return to
deliberately evade taxes or when no return was filed.
COLLECTIONS
The
IRS generally has 10 years from the date of assessment
to collect taxes. However, the
Statute of Limitations for collection is extended
while an offer in compromise is pending, during
bankruptcy proceedings, when a taxpayer assistance
order is in process, when an individual is absent
from the country for more than 6 months, during a due
process appeal, while some court issues are litigated
and by taxpayer agreement.
AMENDING
RETURNS
There
is no statute of limitations for amending substitute
filed returns to reduce a tax liability.
However, you will generally not receive refunds or
offsets of taxes owed for another year if the amended
return is filed the later of 3 years from the due date
of the return or two years from the time the tax
was paid.
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