What time limits affect how the IRS can come after you?

On Behalf of | Sep 16, 2021 | IRS Tax Law

Tax law can be complicated, so it’s not surprising that people make mistakes or get tripped up trying to do the right thing, especially when their income is more complex than just the basics. If you have made a mistake on your Texas tax return, there are time limits that affect how long the IRS can pursue you for past returns. Understanding the statute of limitations for different circumstances can help you know what kind of IRS action to look out for.

What is the statute of limitations?

Under IRS tax law, the IRS has three years from the date it assesses a tax amount to determine that it needs additional taxes from you. The date of assessment could be the date that you filed taxes for the year or a later date when the IRS actually checked and recorded your return.

What are other relevant time limits?

In any case, if three years pass, then the IRS can no longer pursue additional taxes for that filing. However, there are exceptions. if the IRS believes that you left out a large amount of income, for example, then the duration becomes six years. If the IRS thinks that you committed fraud intentionally or tried to avoid filing a return at all when you should have filed, then there is no limit, and the IRS can take as long as it wants.

While the IRS has just three years to ask for more taxes from you in most cases, it could be much longer depending on your specific tax situation. The IRS always starts with an official letter to you notifying you of the timing and the nature of the agency’s actions.