IRS Can Audit 6 Tax Years Not 3

If you are hiding income from the taxman--or just worried you might not be able to substantiate every deduction--are you at risk for three years, six years, or more? Taxes are horribly complex, and even innocent activities can be misinterpreted. That's one of many reasons it pays to know how far back you can be audited. Start with the old rule that the IRS usually has three years after you file to audit you.

But there are many exceptions that give the IRS six years or longer. Several of those exceptions are so prevalent today that the six year statute of limitations is becoming more common. The three years is doubled to six if you omitted more than 25% of your income. For years, there was a debate over what it means to omit income from your return. Taxpayers and some courts said "omit" means leave off, as in don't report. But the IRS said it was much broader, including reporting that has the effect of an omission of income.

Read More: https://www.forbes.com/sites/robertwood/2017/02/09/irs-can-audit-6-tax-years-not-3-so-be-careful/#44a867f15994

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