Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 124956  
Subject: Re: Statute of limitations Date: 3/30/2012 7:53 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
My understanding is that the audit must be complete before the 3 year deadline (unless fraud or other specific extension) or the taxpayer isn't liable. Notice for a routine audit a day before or during the third is unlikely, because of the risk that after spending significant time in the audit that it might not complete before the 3 year deadline.

You've got the right idea. But in practice it works a bit differently.

If there is some risk that the audit will take longer than the statute of limitations, the auditor will generally ask the taxpayer to agree to an extension of the statute.

You are free to refuse to extend the statute, but the auditor will then generally complete their audit immediately, disallowing all deductions under audit. That put the taxpayer in the position of having to go to tax court to make their case.

It's usually a good idea to agree to the extension of the statute. I sometimes wait and make them ask a second time for the statute extension. Just making sure they're doing their job, you know. ;-)

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.