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How Many Years Can the IRS Audit Me For?

On: April 10, 2018

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Generally, in an IRS Tax Audit, the IRS can include tax returns filed within the last three years in a Tax Audit. If the IRS identifies a substantial error, they may add additional years. If they are auditing you for years that you have not filed tax returns, this is a very bad situation. The IRS will assess your tax liability based on income reported to you by third parties and will not take into account your valid deductions, expenses and dependents. A truck driver can make $1,000,000 and spend $995,000 on gas and get taxed on the full $1,000,000. They usually don’t go back more than the last six years. The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of tax returns filed within the last two years.

If an IRS Tax Audit is not resolved, the IRS may request extending the statute of limitations to assess the tax. The IRS statute of limitations limits the time allowed to assess additional tax. It is generally three years after a return is due or was filed, whichever is later. There is also an IRS statute of limitations for making tax refunds. Extending the IRS statute gives you more time to provide further documentation to support your position; request an appeal if you do not agree with the IRS Tax Audit results; or to claim a tax refund or credit. It also gives the IRS time to complete the Tax Audit and provides time to process the Tax Audit results.

You don’t have to agree to extend the IRS statute of limitations date. However if you don’t agree, the auditor will be forced to make a determination based upon the information provided at that time.

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