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How long does IRS have to audit your tax returns?

November 15, 2018

Posted in Uncategorized

[Click below to Play the video]

If I want to be cynical about it, the answer is the time never ends. But generally speaking, IRS has the following time frame to audit your business:

3 years – after the filing of your tax return.


6 years – if you omitted 25% of income on the tax return filed…

Further but (also known as the exception)…

No time limit for IRS if you did not file tax return or filed a fraudulent tax return.

Sarcastically speaking…

The concept of “you are innocent until proven guilty” does not apply to IRS. The IRS standard is you are guilty until you can prove IRS is wrong, and if you don’t file the tax returns, IRS will file them for you with the income or expenses assumed by IRS regardless whether assumptions are ridiculous or laughable or without any basis in reasons or common sense!

So to prove yourself that you are innocent (or correctly report your income and expense on your tax returns), I recommend the following actions:

1. Keep good records
2. Keep copies of all your past returns
Report all your income
3. Disclose your tax positions on your return
4. Have your return professionally prepared.
5. Report offshore accounts on both tax returns and FBARs
6. Steer clear of tax shelters and things the IRS counts as listed transactions – tax avoidance transactions.
7. And most important of all, DO NOT ignore any notices from the IRS.

If you have doubts or have any questions ALWAYS, ALWAYS, AND ALWAYS call us right away – (714) 415-2007.