The most recent data from the IRS on individual tax returns indicates that of 131 million returns filed, about 5 million were expected to be amended.
Taxpayers often want to know how long the IRS has to audit and assess additional tax on their tax returns. For taxpayers who reported all their income, the IRS has three years from the date of filing the returns to examine them.
Several months ago we met with a taxpayer who was subject to an IRS wage levy for 2002 and 2003 back taxes and wanted to know how to stop the wage garnishment.
Three-Year Statute of Limitations
Normally, the IRS has three years from the time you file your tax return to assess tax. The statute of limitations on assessment begins to run on the day after you file your tax return. Thus, the day of filing is excluded from the computation of the three-year period. For example, if you file your 2011 Form 1040 on April 17, 2012, the IRS must assess any deficiency on or before April 17, 2015.
The IRS generally has ten (10) years to collect a tax debt. After that time has passed, the IRS can no longer legally collect the debt. The ten year period begins from the date that the tax was assessed, not when it was originally due. So, if you filed your tax return late the 10 year period does not begin running until you filed the return. The date that your tax debt expires is known as the Collection Statute Expiration Date.