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[[Here's one for the books....(mine anyway):

It became apparent last year (1998) that my 1994 Federal return
was...ummm.... not 100% accurate. I found this out after the IRS sent me a "bill"
for something in the nieghborhod of $31,000.

Once the nitro took affect, I called my accountant and he "re"did my return (I
did the original back in '95).
According to his calculations, and based upon the information from my return
(the original), he determined (and I immediately agreed) that the IRS actually
owed ME $850.

Shortly after submitting this "corrected" return, I was advised by the IRS that
because there was a more than 3 year "gap" (1995 - 1998), they were not
recognizing the amount due as it was past the three (3) year statute of

Without knowing the exact dates, it is really difficult to deal with your question. But, generally, the statute of limitations is three years from the due date of the tax return...or the actual filing date. So if your 1994 tax return was timely filed, your statute expired on April 15, 1998. (three years from the due date of the tax return...which would have been April 15, 1995). Your accountant should have known this immediately.

[[ Is anyone else as surprised to hear this as I was? Aside from contacting my
Congressman, any thoughts as to other avenues that might be available to me?]]

Again, not knowing the facts, I can't really give an opinion. But it's uncommon for IRS to send you a "bill", and then not let you deal with the issues at hand. There are forms to be signed, statutes to be extended, etc. I would really need to know how and why the entire issue came about to really comment. (and I really don't have time to get into this discussion at this time of year...but I'll be glad to kick it around after tax season).

But you REALLY need to retain the services of a qualified tax pro with experience in IRS collection and assessment matters. They should be able to review all of the documents and give you some support.

[[ What troubles me most is the IRS is the partt that RAISED the issue to begin
with... MORE than 3 years late(r).]]

Which is an issue that needs to be discussed. Unless the IRS is claiming fraud or substantial understatement (which do extend the statute), they also have to live with the 3 year statute. Which is why you really need to get a tax pro with experience in these issues.

[[ I'm interested in hearing another perspective.....]]

If you would like to read more about this issue, check out IRS Publications 1 and 594 at the IRS web site. That'll give you some additional information that you can use.

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