The IRS Audit Blog

Archive for the ‘Audit Limits’ Category

Question: Can anyone tell me the correct Title and Section of the US Code?

Here is an excerpt from an article from Apple.com on the statute of limitations for the IRS’ collection of back taxes:

The IRS has 10 years to collect outstanding tax liabilities. This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn’t collect the full amount in the 10-year period, then the remaining balance on the account disappears forever. The statute of limitations on collecting the tax has expired.

What is the statute number?

Answer: 26 USC 6501(a) gives three years from the date a return was filed for the IRS to collect a balance due. However, once the IRS actually makes an assessment of taxes (generally about 6 to 8 months after the return is filed), 26 USC 6502(a) gives ten years from the date of the assessment for the IRS to collect the taxes.

For more specific information on your tax problem, contact a tax attorney in your state. For a referral, contact your local or state bar association.

John Bullis: What is the ‘statute of limitations?’

A part of the tax law is the “statute of limitations.” That is the limit of how long a tax return is open for audit by IRS or for amendment by the taxpayer.

Audit Preparation – Statute of Limitations for Audits

Question: Accountants! Don’t be boring, save the planet instead!?

Have you lived in a country which should be stinking rich but is jam packed with people living in blighted misery?

The fundamental reason is always corruption in public office. Who can spot that? Only accountants. But audit within a nation is controlled by the government of said nation, and accountants with guns at their heads or bungs in their pockets are only human. So here’s my idea:

…a UN sponsored crack team of Chartered Accountants and Auditors who can be called or sent into a country and audit all or any part of the public tax and spend therein. They could have very limited powers, e.g. report only (red/amber/green), or you could give them the ability to send people to the Hague.

Participation by the countries concerned would be voluntary (which suggests that limited powers are actually more effective) and would occur if a government wanted to show itself to be clean, maybe after a scandal, or because it was excluded from some club such as WTO.

Well?

Answer: I like that idea. The practical issues (such as the breadth of specialist knowledge required) are immense though; public sector accounting is nowhere near as organised as corporate accounting (which itself varies wildly across jurisdictions). Also, the limitation of powers means they would have to face the same problems that make UN weapon inspections so ineffective.

Simplified net income taxation okayed

THE House committee on ways and means has approved a bill simplifying the net income taxation scheme (SNITS) that aims to limit from 10 to eight the allowable business deductions from gross revenues for self-employed individuals and professionals. As per the approved bill, deductions from gross income shall be allowed for only eight expenses: salaries and wages; supplies and utilities; rentals …

Energy Efficiency Audit Training | …

Question: another ethics in accounting question?

You are a newly qualified chartered accountant who has recently moved to a midsize town to start a local practice. Your client requires an audit. Standard procedure requires that you verify the inventory count at the year end. However, the year end-end was a month ago. This would be your first client and would bring in a fee of $5000. Do you accept the client? If so, under what conditions?

Answer: Yes. But you have to put into your Auditor’s notes in the Audit that the count was done outside of standard procedure, and that the audit reflect inventory as of Date XX/XX/XXXX, not the fiscal year end.

Audit finds deficiencies in city controls

STAMFORD — Auditors have identified seven “significant” deficiencies in financial controls in the city’s year-end audit, according to a draft report of the document.

Ron Paul: The Big Guns Have Lined Up Against HR 1207 (House Floor 7/30/09)

Life insurance premium: Separate tax sop sought

Give separate tax exemption limit of Rs 50000 for the life insurance premium.

Tax Deduction Tips & Advice : How to Determine if You Can Itemize Tax Deductions

Question: Is a California Guaranteed Student Loan subject to a Statute of Limitations?

I’m being harassed for a student loan that is from 1987. The IRS has never attached my tax returns or garnished my wages. Is this debt legitimate?

Answer: All GSLs (guaranteed student loans) are arms of the FFELP (federally funded) and thus have no statute of limitations.

Section 484A(a) of the Higher Education Action provides that no statute of limitations bars enforcement action to collect Federal student loans, including collection by offset, lawsuit, or enforcement on student loan judgments. 20 U.S.C. § 1091a(a). State law that would otherwise limit these actions is superseded by Federal law and cannot bar collection action.

Bill would help youth identity theft victims

(AP:CARSON CITY, Nev.) By the time Carlos Hernandez turned 18, little did he know his credit was trashed. Since the age of 9, he had obtained a mortgage, bought cars, obtained credit cards _ and racked up loads debt. He had a criminal record, too _ not his own _ which kept him out of the Navy.

Do IRS Problems go on forever?