How Many Years Back Can the IRS Audit Me?

On: March 1, 2024

Opening the mailbox to find a letter from the IRS sends your fingers trembling and your heart racing. Many Americans sit in fear each year of a tax audit and cross their fingers that they are not selected. Tax audits are not only stressful, but they are also time consuming and can lead to penalties and fines that you may become responsible for. 

Filing your tax returns on time is a surefire way to avoid any fines associated with late filing but it does not mean you are free from an audit by the IRS. If you have been notified that you have been selected for an IRS tax audit, now is the time to contact an experienced tax accountant to walk you through what to do next. 

Who Does the IRS Audit?

The IRS can audit any tax return and any taxpayer. The IRS does not disclose what exactly triggers an audit; however, there are red flags that can increase your chances of an audit and the IRS does use a computer system that randomly selects returns for audit as well. 

Does the IRS Have Time Limits When it Comes to an Audit?

Generally, yes. However, there are stipulations. In general, there is a time limit on how far back the IRS can audit you, but these time periods can be extended based on certain factors, and, in some cases, extended indefinitely. 

3-Year Audit 

Generally speaking, the IRS has 3 years to audit you after your tax return has been filed. If you file your tax return before the due date, the 3-year limitation runs from the federal due date. Should you be granted an extension to file, the limitation runs from the extended due date. If you have filed a late return, the limitation starts from the late date that you filed. 

6-Year Audit 

It is possible that the IRS can audit your tax returns up to 6 years from the filing date. While this is not always common, it can occur when the IRS finds that you have understated or overstated your income. In addition, the IRS is able to audit you for up to 6 years on any foreign income, which also includes assets and gifts, if you fail to claim $5,000 or more of it. 

Extended Indefinitely Audit 

This is a no time limit audit and is not very common, but, when deemed appropriate, the IRS can audit any of your tax returns, no matter how long it has been. 

The no time limit audit can occur when you have filed a fraudulent tax return, or you do not file a tax return. 

Is There a Time Limit for the IRS to Collect Back Taxes from an Audit?

Yes and no. Once you have been assessed a tax liability, the IRS generally has 10 years to collect on that debt. If it is not collected in that amount of time, the IRS is unable to further pursue collection activity on it. 

However, it is possible for this timeframe to get extended or reset depending on certain factors. 

Leading Tax Group Can Help with Your Tax Audit 

Being audited by the IRS is serious and can have negative consequences. While the IRS has a limited timeframe to audit you and collect on a tax liability, there are certain instances when these time limits do not apply. 

Understanding how an audit works and what is required of you can be confusing and difficult making the process that much harder. While you may be tempted to handle an IRS tax audit on your own, it is recommended that you work with an experienced tax professional who can help. 

At Leading Tax Group, our experts are highly experienced in all things tax related. We understand the ins and outs of the IRS, their collection efforts, and how to help keep your tax liability as low as possible. Our team provides some of the most affordable and aggressive representation locally in California. 

Don’t try to go at an audit alone. The IRS is not your friend and is not out to make sure your best interests are met. Whether you received an IRS notice of an audit or you are currently navigating your way through an audit, reach out to Leading Tax Group today to schedule a consultation with us.