24 Dec How long can Trump’s tax returns be under audit?
Q. President Trump’s tax returns… he says they are under audit. How long can someone’s return be audited and are there limits for the IRS?
A. An audit isn’t something most taxpayers look forward to.
Generally, the IRS has three years from the date an income tax return is filed — or three years from April 15 if the return is filed filed prior to April 15 — to commence an audit on an income tax return, said David Ritter, chair of the tax practice at Brach Eichler in Roseland.
He said in certain situations involving substantial understatements of gross income, the period is extended to six years.
If a return is not filed or is fraudulent, then there is no limit to the time in which the IRS can commence an audit, he said.
“The audit must be completed within the same time period however the IRS can request extensions of the audit period,” he said. “Most taxpayers will provide such extensions upon request because the alternative is generally an immediate tax assessment based on whatever facts are available to the IRS.”
The extensions can be extended and continued for an indefinite period of time.
In the event of an assessment — meaning you owe money — the taxpayer must go to court if they want to challenge the assessment, Ritter said.
“The assessment is presumed correct and the taxpayer must prove otherwise,” he said.
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This story was originally published on Dec. 23, 2019.
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