ip.book
  • Home
  • Bookkeeping
  • Office Organization
  • Additional Services
  • Our Clients
  • About Us
  • Contact Us
  • עברית
  • Bulletin Board

Audits and Examinations

11/14/2012

0 Comments

 
Q: After what period is my federal tax return safe from audit?


A: Generally, the time-frame within which the IRS can examine a federal tax
  return you have filed is three years. To be more specific, Code Sec. 6501
states  that the IRS has three years from the later of the deadline for filing
the  return (usually April 15th for individuals) or the date you actually filed
the  return. This means that if you file your return on May 10, 2009, the IRS
will  have until May 10, 2012 to look at it and "assess a deficiency;" not April
17,  2012.


There are exceptions and caveats to this general principle, however. If you
  file prior to April 15, the IRS still has until April 15 of the third year that
  follows to audit your return. This means that if you filed an income tax return
  on February 10, 2009, you still won't be out-of-the-woods until April 15, 2012.
  For taxpayers who file fraudulent returns, incorrect returns with the intent to
  evade tax, and those who do not file at all, the IRS may open an audit at any
  time.


(Don't confuse the deadline for IRS tax assessments with your right to file a
  refund claim for an amount that you overpaid, either on a filed return or
  through withholding or estimated tax payments. That deadline is the later of
  three years from the filing deadline or two years from your last tax
  payment.)


You may also find some comfort in the practical IRS audit-cycle rhythm. While
  you are never truly beyond an audit until the statute of limitations has
  properly run, there are some general standards to keep in mind. Office audits
  are usually done within 1 1/2 years of the time the return was filed, and field
  office audits are complete by 2 1/2 years. The rule of thumb is that if you
  haven't been contacted within this time frame, you're probably not going to be.
  Especially for small businesses, the IRS has promised to shorten its normal
  audit cycle so that those taxpayers are not "left hanging" on potential tax
  liabilities (with interest and penalties) until the three-year limitations
  period has expired. Whether this shortened period happens, however, is still
  open to speculation. Most businesses should continue to make it a practice to
  keep "tax reserves" to cover such audit liabilities.

0 Comments



Leave a Reply.

    Archives

    January 2014
    December 2013
    October 2013
    July 2013
    November 2012
    April 2012
    November 2011