Understanding the IRS audit statute of limitations is essential for taxpayers who want to know how long the IRS can review their tax returns. This time limit protects taxpayers by clarifying the period during which the IRS can assess additional taxes or initiate audits. Knowing these rules can help you better prepare for potential audits and understand your rights.

What Is the IRS Audit Statute of Limitations?

The IRS audit statute of limitations is the timeframe in which the IRS can audit your tax return and assess additional taxes. For most taxpayers, this period lasts three years from the date you file your return or the original due date, whichever is later. After this period expires, the IRS generally cannot open an audit or propose changes to your tax liability.

This limit is designed to protect taxpayers by creating certainty about when tax matters are considered final. It encourages timely audits and helps you know when you can confidently move on from past tax years.

Common Exceptions That Extend the Statute of Limitations

While the three-year period applies to most cases, several exceptions can extend the IRS audit statute of limitations. For example:

• If you underreport your income by more than 25%, the IRS has six years to audit your return. This longer period allows the IRS to investigate significant discrepancies. 

• If you do not file a tax return at all, there is no statute of limitations, meaning the IRS can audit at any time. 

• In cases of fraud or intentional tax evasion, the IRS can audit indefinitely, as no time limit applies. 

Taxpayers can also sign waivers that extend the statute of limitations, often to allow more time for the IRS and the taxpayer to resolve complex issues.

How the Statute of Limitations Affects Taxpayers

The statute of limitations impacts how you manage your tax records and audit expectations. Knowing when the IRS’s authority to audit expires can help you organize your documents and prepare for possible reviews. 

For instance, after the three-year window closes, you generally have no obligation to keep certain supporting records. However, it’s wise to retain important tax records for at least seven years, considering possible exceptions. 

Also, understanding the statute of limitations helps you assess your legal options if you disagree with an IRS audit. You can plan your defense confidently, knowing when the IRS must act or close the case. 

Navigating IRS Audit Timeframes

Navigating the IRS audit statute of limitations can be complicated. If you believe your IRS audit statute of limitations is nearing expiration, take action. Start by reviewing your past returns and any correspondence from the IRS. Confirm the filing dates and any extensions or waivers that might apply.

Next, consult a qualified tax professional or attorney. They can clarify timelines, explain your rights, and help prepare for any final audit actions. Timely advice ensures you don’t miss deadlines or lose legal protections.

Finding IRS Audit Support

The IRS audit statute of limitations is a critical protection that limits how long the IRS can review your tax returns. Understanding this timeframe helps you plan, keep necessary records, and assert your rights during audits.

Whether you’re facing an IRS audit or just hoping to find affordable legal support for your small business, LegalFix is your go-to source for free legal information—and a vetted network of business attorneys in your state who provide initial legal advice at no additional charge and small business legal services at reduced rates. 

You can also find helpful articles and state-specific explanations of nearly 1,600 legal topics—or browse state and federal statutes to better understand the laws that affect you—all at LegalFix.com.