IRS AUDITS AND THE LAW

IRS AUDITS AND THE LAW

If you’ve ever wondered how far back the IRS can go to audit you I’ll be discussing this below. Some people take their chances in filing “questionable” returns with the IRS and then later become scared after doing so. As unpleasant as an audit might be, the real question you should be asking yourself is “Do I lawfully owe the tax at all?”

Many Americans put themselves through unneeded fear, anxiety and sleepless nights because of fear of the IRS. This happens because they have been conditioned into believing they actually owe income taxes when they do not. Now let’s discuss t-he statute of limitations for those who do owe the tax.

Internal Revenue Code, Section 6501 provides a three-year statute of limitations on tax audits. It’s important to note if you request a tax return on extension it has the downside of also extending the time your return is subject to an audit. So, if you filed your 2017 tax return on April 17, 2018, the IRS had until April 17, 2021, to audit it.

Also, if you had requested an automatic extension this gives the IRS a three year window to audit your return and assess any additional tax and penalties due.

Section 6501 also sets forth a second level of the statute of limitations.

The three-year limitation can double to six years if the IRS determines that you willfully left out an amount from your gross income an amount that exceeds 25 percent of the stated gross income.

In that case, the IRS could audit your 2017 as late as 2023. It often happens that people underreport their income due to a wide variety of legitimate reasons, which can unwittingly lead to complications. It’s worth noting that the IRS doesn’t consider any amount as omitted from gross income as long as you disclose it in the tax return, or in a statement attached to it, and you do it in a manner that’s sufficient for the IRS to become aware of the nature and amount of the item.

So, if for example you used an estimated cost basis to reduce the capital gains income on the sale of property, but you disclosed this and the possible lower cost basis on a written statement, the three year statute of limitations would apply, not the six. Finally, there is a third level to the statute of limitations in section 6501: The IRS has no time limit when an audit pertains to assessment of tax if they determine a return is false or fraudulent, reflects a willful attempt to evade taxation or when no tax return at all is filed.

At the core of this are the real questions, which very few Americans ask themselves: “Do I legitimately “owe” the tax in the first place?” “What is the basis to discover the answer to this?” If we’re honest with ourselves No one “feels” good about paying income taxes even though the federal government portrays the paying of taxes as our “civil duty.”

Here is the bottom line, According to several U.S. Supreme Court decisions, if you work in private enterprise, (i.e. not for the federal government) you owe no taxes on the money you earn from your employment. We’ve proven this over and over again by getting clients refunds. Would you like to learn more, then visit http://endtaxes4ever.com/

End Taxes 4 Ever is a team of tax experts serving clients across the nation to ensure they are only paying the amount of taxes owed and remaining in full compliance with both State and Federal income tax laws. Our tax experts have discovered that nearly all Americans are not just overpaying on income taxes, but in the vast majority of cases they lawfully required to very little if anything at all.

We give tax planning strategies for high income earners, guide individuals in how to legally stop paying taxes, remain in full compliance with the income tax law and get the biggest tax refund that the law allows. Contact us now by visiting our website.