Exceptions to the Statute of Limitations for IRS Audits

Exceptions to the Statute of Limitations for IRS Audits

Most people are aware that the government only has a certain number of years to collect unpaid taxes before the statute of limitations passes and they can no longer pursue you for payment of that tax liability. However, not everyone is aware that there is also a statute of limitations (or a time frame) in which the IRS can audit your tax return.

In most cases, the IRS only has three years from the date you filed your tax return, or the date it was due if not filed on time, in which to audit your return. If they fail to audit you within that time frame, then they can’t audit you later. However, there are a few exceptions. Read on to learn more about exceptions to the statute of limitations for IRS audits.

Statute of Limitations for Audits Is Extended under These Circumstances

Below, these are some of the exceptions for when the IRS can extend the statute of limitations on an audit of your tax return.

• If your income was off by 25 percent or more, then the IRS has up to six years to perform an audit on you.
• If you lied or purposely submitted a fraudulent tax return, then the IRS has an indefinite time frame for auditing your return.
• When you have willfully attempted to evade paying your taxes, the time frame is indefinite.
• When you fail to submit a tax return at all, the statute of limitations will not apply.

In some cases, lawmakers may also extend the statute of limitations. For instance, the IRS usually has three years to audit payroll tax returns, but as of 2023, the agency has up to five years to audit employee retention credits (ERC) on payroll tax returns from certain time periods.

Reach Out to an IRS Audit Lawyer

Now you know the exceptions to the statute of limitations for IRS audits, but you may still be unsure if these exceptions apply to your situation. Call The W Tax Group for help with your tax matter and receive a free tax liability analysis. Reach out to us through the form below or by calling our nationwide headquarters directly at 877-500-4930.