Statute of Limitations for Federal Tax Returns

The statute of limitations on tax returns is three years, except for substantial misrepresentations, where a six-year statute may apply.

Generally, the statute of limitations that applies to an individual or business tax return is three years from the due date of the return, or the date of actual filing, whichever is later. However, in cases of a substantial omission of reportable income, failure to file or fraud, longer limitations may apply.

Three-year Statute of Limitations

Generally, Internal Revenue Code 6501(a) governs the statute of limitations on tax returns. This applies in all noncriminal cases where taxpayers actually file returns. The three-year clock starts when the return is due (disregarding extensions), or the IRS receives the return, whichever is later.

Omissions

Where the return omitted more than 25 percent of gross income, but there is no accusation of fraud or willful tax evasion, a six-year statute of limitations applies under IRC 6501(e).

Exceptions for Fraud and Failure to File

IRC Section 6501(c) provides for the following exceptions: fraudulent returns with the intent to evade tax (false returns), willful attempt to evade tax or failure to file. The code allows the IRS to assess penalties for these cases at any time.

References

• Text of IRC 6501
• Determining the Statute of Limitations in Federal Tax Cases; CPA Journal; Robert H. Breakfield, 2006

Resources

• IRS Publication 17: Your Federal Income Tax