Generally, your tax return cannot be audited after three years from its original filing date. If you filed before the due date, April 15, the three years starts running from April 15 of the year it was due.
There are a few exceptions to the three year rule, however:
o If you understated your income by 25% or more on your tax return, the audit deadline is extended to six years.
o If you file a fraudulent return, there is no time limit on an audit. Tax fraud is conduct meant to deceive the IRS, such as using a false Social Security number. A really big mistake, if done negligently, not intentionally, isn't fraud. The burden of proving fraud is always on the IRS. And the IRS seldom audits returns after three years even if fraud is evident.
o The audit time limit period, called a statute of limitations, starts to run only if and when you file a tax return. Nonfiled tax years are always open to audit. If, however, you haven't filed and haven't heard from the IRS within six years of the due date of a tax return, you have probably escaped the audit net.
Audit notices are usually mailed between 12 and 18 months after you file your return. Generally, if you haven't heard from the IRS within 18 months, you won't be audited. IRS audit notices are sent by first class mail and never by email or telephone contact.
The Internal Revenue Manual directs auditors to complete audits within 28 months after you file your tax return. Legally, the IRS has 36 months. The 28-month internal deadline is imposed, however, to allow eight additional months for the IRS to process any appeal you might request. These internal IRS time limits usually work to your benefit. Audit cases are often delayed within the IRS for various reasons-backlogs, agent transfers, postponements, complex issues, and lost files. The older your file gets, the more anxious the IRS is to close it. Auditors can be fired for missing the 36-month deadline, known as blowing the statute, but it still happens.
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