No one enjoys dealing with the IRS over audits or even criminal investigations. But the IRS has some time limits that it must follow. These time limits might help you or your tax specialist or your attorney. So here are some specific rights you have when dealing with the IRS. These rights have time limits for the IRS to act, but as you’ll see there are exceptions that can stop the clock for the IRS and let their actions continue.
THE THREE YEAR LIMIT
The IRS generally has three years from the date that you file your tax return to assess any additional tax for that tax year. But there are some limited exceptions to this three year rule. One of the exceptions is that you failed to file, or you filed a fraudulent return. In those cases, the IRS has an unlimited amount of time to assess tax for that year. So if your return is not fraudulent and you filed, the three year clock is ticking — and that’s good for you. But if there is evidence of fraud, or if you failed to file a tax return, the IRS can keep looking and adding to your tax bill.
THE TEN YEAR LIMIT
There is also a ten-year clock for the IRS. The IRS generally has 10 years from an assessment date to collect any unpaid taxes. This ten year deadline for the IRS cannot be extended except if you entered into an installment agreement or if the IRS obtained a court judgment against you. In reality, that gives the IRS a lot of leeway to collect what you owe, and this is why you need to discuss your options with a tax professional including your options for an Offer In Compromise or using the Fresh Start Initiative.
There are also circumstances when the 10-year collection deadline may be suspended. These circumstances include when the IRS cannot collect money due to the bankruptcy of the taxpayer, or there’s an ongoing collection “due process proceeding” involving the taxpayer. Again, talk to your tax professional about other options to settle your IRS debt.
THE LIMIT ON AUDITS
You also have a right about the number of audits that can be brought against you. Generally a taxpayer will only be subject to one audit per tax year. However, the IRS has the right to reopen an audit for a previous tax year if the IRS finds it necessary. It could be necessary to reopen an audit if the IRS believes you filed a fraudulent claim. If this happens, discuss your options with your tax professional and if needed a tax lawyer.
TIME LIMITS THAT WORK AGAINST YOU
There are other time limits that can work against you. For example there’s a time limit for claiming a refund on tax money. This is generally three years from the time a tax return is supposed to be filed. If you don’t file a tax return that calls for your refund the IRS can keep the money. This money can include excess money that was withheld from employers, or money that was withheld by casinos when you won jackpots.
TALK TO A TAX PROFESSIONAL
It’s always best to ask a tax professional about any tax issues you might have. If you have a question about your taxes you can start with us because we offer a free telephone consultation.
Here’s the phone number to call the tax experts at Tax Relief Info for a free consultation: (800) 322-2414
Our tax experts can talk to you about your tax issues such as your tax debt, the IRS Fresh Start Initiative, the IRS Offer In Compromise Program, and the Innocent Spouse Rule. Our tax experts can also help guide you about how to file overdue or missing tax returns so you can claim income tax refunds before the expiration date to claim those refunds. And our tax experts can help you find a tax refund that is due to you but you haven’t received yet.
There are many tax issues that can be covered during your free telephone consultation. Also remember that the Information on this website is free to use. There are no memberships or subscription fees unlike some other websites operated by other companies including news outlets. So check this site for the latest IRS news.