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Not only is there a Statute of Limitations on Tax Refunds, but also on IRS Audits, and Collections.

  • 3 Years to Claim a Refund
  • 3 Years to be Audited
  • 3 Years to Amend a Previously Filed Return and
  • 10 Years to Pay Tax Debts

The IRS has three years to give you a refund, three years to audit your tax return, and ten years to collect any tax due. Together, these laws are
called the Statute of Limitations. They put time limits on various
tax-related actions that you and the IRS can take.

 

You have 3 Years to Claim a Tax Refund

This is measured from the original deadline of the tax return, plus three years. For example, your 2007 tax return was due on April 15, 2008.
2008 plus 3 is 2011. You have until April 15th, 2011, to file your 2007
tax return and still get a refund. The key word here is 'refund.' If
you file after that deadline, the IRS may still accept your return but
deny your refund because it has 'expired.' it goes away forever due to
the statute of limitations for claiming a refund.

 

The IRS has 3 Years to Audit Your Tax Return or to Assess any Additional Tax Liabilities

This is measured from the day you actually file your tax return. If you filed your taxes before the deadline, the time is measured from the
April 15th deadline. For example, you filed your 2006 tax return on
February 15, 2007. the 3-year time period for an audit begins ticking
from April 16, 2007, (the filing deadline) and will stop ticking on April 16th, 2010. On April 17th, 2010, the IRS cannot audit your 2006
tax return <span>unless there is a suspicion of tax
fraud</span>.

 

You have 3 Years to Amend Your Tax Return

If there was a mistake made on your tax return or you missed an opportunity to take advantage of a tax credit or deduction, the error
may be in your favor. Other errors could result in the favor of the IRS
but its still better for you to discover this error before they do and
try to stick you with a tax fraud claim. Some people fear that filing
an amendment will increase their chances of being audited. This is not
true. The IRS recognizes that a mistake could have been made and that's
why they allow you to amend your return but they only give you 3 years
in which to do so. For example, if you discover a mistake on your 2006
return that you filed in 2007, you have until April 15, 2010 to file an
amendment. Since this date has passed, you can no longer amend this
return.

 

The IRS has 10 Years to Collect Outstanding Tax Liabilities

This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance
due on a tax return, an assessment from an audit, or a proposed
assessment that has become final. From that day, the IRS has ten years
to collect the full amount, plus any penalties and interest. If the IRs
doesn't collect the full amount in the 10-year period, then the
remaining balance on the account disappears forever. The statute of
limitations on collecting the tax has expired.

 

Action Plan Item

It is in your best interest to file your tax returns at your earliest possible convenience. First, you can claim refunds. Second, it starts
the clock ticking on the 3-year statute for audits and the 10-year
statute for collections.

 

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My name is Ktasha Nicole Hardge and I am a Tax Professional. For the past 20 years, I have helped (and continue to help) individuals and small
business owners all across the U.S. to keep more of what they make. I
put tremendous care and energy into each client relationship. In order to
better educate my viewers who 'like' this page, I provide this
comprehensive information as a FREE No-Obligation service for all my
visitors. I truly hope you find these postings, tools, and resources
helpful. I am available year-round for all tax services and to answer
your questions.

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