Receiving an audit notice can be stressful. The IRS conducts audits to determine whether you’re reporting accurate information and following tax laws. The agency double-checks to make sure everything adds up correctly in your tax returns.
There can be several reasons why the IRS will audit you. But how far back can the IRS audit?
At Steward Ingram & Cooper, PLLC, we can assist you with unresolved tax issues from previous or present times. We’re sharing a timeline on the IRS audit procedure.
IRS Audit Timeline
According to the Federal Statute of Limitations, the IRS can audit back to 3 years. However, this is not always the case. While there is normally a time limit on when the IRS can audit you, this time can be extended and varies.
3 Year Audit
Generally, the IRS can audit back to 3 years. The statute of limitations runs 3 years from when you have filed your tax returns. To be more specific, the IRS can audit up to 3 years of the tax filing due date. This means that if the due date for filing tax returns this year was April 18, the IRS can audit you up till April 18, 2025.
In the case that you acquire an extension for filing your tax returns, the 3 year audit time frame extends to the filing date you acquire. Similarly, if you miss the tax filing deadline and file late, the 3-year audit date will also extend accordingly.
6 Year Audit
While an audit most typically goes back 3 years, there are some exceptions. The IRS may extend the time to audit you even if you haven’t committed any fraud.
If there is a significant amount of unreported income, the IRS can go back 6 years to audit you. This extended audit is to clarify whether you were compliant with tax laws during that time period.
Indefinite Audit Period
There are also scenarios in which the time period for an audit remains open indefinitely. If you do not file tax returns for a particular year, technically the statute of limitations does not begin. This means the IRS has an unlimited amount of time to audit you until you file your tax returns.
Another situation in which the IRS has an unlimited amount of time to audit you is when it has established information of fraudulent activity. If you behave in fraudulent activity with criminal intent, the IRS has the right to audit you extensively to gather information.
How Long Does an Audit Last?
How long an audit lasts depends on the case at hand. There are several factors involved that will determine how long an audit will take including:
- The nature of the issue at hand
- The compliance of the party being audited
- The availability of information requested
- The acceptance or denial of the audit results
Let Us Help You With Your Tax Planning
If you need more information about dealing with an IRS audit or require help with your tax planning, we can assist you. We offer tax planning and preparation services for business taxes, personal taxes, estates, and trusts, as well as non-profit tax filing. Plan ahead. Contact us today at (919) 872-0866 for financial services you can trust in Raleigh, Durham, and surrounding areas.