Tax Questions

How Many Years Can the IRS Go Back and Audit?


People are always afraid that the IRS may audit them and they will not have records of the year in which the IRS wants to audit. In general, the IRS has three years from the tax filing deadline to audit a taxpayer. So, it's a tax due date was April 15th, then the IRS has three years from April 15 to audit that tax return. If a taxpayer files his other tax return early, the IRS still has three years from April 15th to audit, not three years from the actual date of which the tax return was filed.

Three Year Statute of Limitation

You may have heard of the term three-year statute of limitation. It represents the number of years that the IRS has to audit a tax return. Within the three years, the IRS can question the taxpayer about a particular tax return, in particular tax deduction, a particular business expense, in particular tax credit, and so on.


Six Year Statute of Limitation

because of the three-year statute of limitation, a taxpayer usually needs to keep all tax records for three years only. There is one exception. If the IRS can prove that the taxpayer has omitted more than 25% of his or her gross income on a tax return, then the IRS has six years to audit and assess additional taxes as well as penalties. In this case, the taxpayer may need to keep his other records for six years.