Extension of Period of Limitations
June 21st, 2009The period of limitations can be extended under certain circumstances. For example, if you failed to report a significant portion of your income, the IRS will have more time to audit your tax returns.
Unreported Income and Period of Limitations
6 Years Period of Limitations
If you did not report income that you should have reported on your return, and it is more than 25% of the income shown on the return, the period of limitations does not run out until 6 years after you filed the return.
Unlimited time to Audit
If a return is false or fraudulent with intent to evade tax, or if no return is filed, an action can generally be brought at any time.
Do I need to Keep my tax records even after the Period of Limitations has Expired?
You may need to keep records relating to the basis of property longer than the period of limitations. Keep those records as long as they are important in figuring the basis of the original or replacement property. Generally, this means for as long as you own the property and, after you dispose of it.
The Importance of Record Keeping of Form W-2
If you receive a Form W-2, keep Copy C until you begin receiving social security benefits. This will help protect your benefits in case there is a question about your work record or earnings in a particular year. Review the information shown on your annual (for workers over age 25) Social Security Statement.
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Posted in General Tax, IRS, IRS Audit, IRS Tax Rules, Income Tax, Personal Tax | 
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