The IRS Audit Blog

Posts Tagged ‘limitation’

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

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: What do politicians mean when they say “It’s time to put that behind us, time to move on…”?

They are always speaking about past sins, often criminal acts, that they don’t want discussed.

Are they speaking about some statute of limitations?

About the feeble minds of the voters?

Or is it the dirtiest kind of rhetorical deception?

If you underpaid your taxes, how well would that excuse work with the IRS?

Answer: It means, go away “little citizen”, we don’t want to listen to your peeves. We know all.

Phillip England and Randall Beckie of Anderson Kill break down how new tax rules might prompt achange in group captive …

We would like to share the following idea from our captive insurance advisory practice. There is more to say about it than space allows here, and you should always consult a professional tax adviser about this and potentially other captive planning ideas.

Tax attorney explains IRS collection statute of limitations

Question: The Specter Of An IRS Audit?

If a woman inadvertently mischaracterized a 401k withdrawal on her 2004 return as a rollover (rather than its actual use — home purchase), and the amount ($20k) was more than 25% of her income:

1. What are the chances the error will be detected if it has not been detected thus far?

2. Is the statute of limitations 6 years from the date the 2004 return was filed?

3. At this point, is there a legal duty to correct the innocent mistake?

Merci.

Answer: 1. The IRS has a habit of waiting until the last minute–just before the limitations period for assessment expires–before opening an audit. But in your case, the initial statute of limitations has passed (see below). So I don’t think it’s likely you would get a letter now.

2. The statute of limitations is three years from the date the return is filed or April 15, whichever is later. HOWEVER, there is a 6-year statute of limitations on assessment of amounts at least 20% of the taxable income on the return. The amount–25% of the income–may not be more than 20% of the TAX she had to report. So it’s impossible to tell without having more detail whether the 3-year period or the 6-year period would apply.

There is NO statute of limitations on fraud. But if she (you) didn’t know of the error at the time you filed the return, then there was no fraud.

3. There is no legal duty to correct an innocent mistake. But the question is, Is it worth the risk of not correcting the mistake, considering all the penalties and interest that come along with it? At this point–after the 3 years is up, but before the 6 years is up–you alreaday would have accrued a lot of interest and penalties, so not too much of a risk.

Retain important records and cut the clutter

As you gather the papers necessary for this year’s tax return preparation, you may be wondering what records you need…

Offer in Compromise | IRS Tax Debt Relief

Keep important records and cut the clutter

As you gather the papers necessary for this year’s tax return preparation, you may be wondering what records you need to keep and how long you need to keep them.

IRS Collection Statute Expiration Date (CSED)

Question: Unpaid Student Loans?

Is there a statute of limitations on unpaid student loans. I have been sent a bill for collection on an unpaid balance of 1200.00. but I also have documents that indicate that the debt was paid off. My problem is this loan is over 20 years old and all my papers indicate it’s paid. The IRS is now taking money from me even though they’ve already garnished over 1700.00 in the past and I don’t know how to make them understand IT”S EFFIN PAID ???>???????????!@$%$#$%^^&*&&*^%#!$

Answer: We try to tell these kids nowadays that they don’t want to over-borrow or renege on their loan payments. Eventually it catches up with you.

If you had a document that stated “Paid In Full” on your prior debt it would probably help. Kinda hindsight now, but get it in writing when you are paid in full in the future. The govt is one of the most inefficient and fraudulent run organizations you will find. Expecting them to keep track and keep good records is nothing short of humorous.

Cars made to go too fast tied to marketing

The Road Warrior answers your questions about North Jersey transportation

IRS Information – statute of limitations – tax assistance – tax help