Should the statute of limitations be waived in your IRS audit or should you force them to finish their work? This is a complex legal and financial question requiring the insight of an experienced and seasoned IRS tax attorney from Allen Barron. It is important to understand the full process of an IRS audit. This is why we have provided a free downloadable guide “What to Expect from an IRS Audit.” There is as much to the “strategy” of an IRS audit as there is to the actual financial information, US tax laws and Generally Accepted Accounting Principles (GAAP) associated with the process. The statue of limitations is one of the important issues which affects many IRS audits.
Generally speaking the IRS has 3 from the date you filed your return to complete an audit of the information contained within that return. This is known as the “Statute of Limitations,” so US taxpayers are not faced with the fear of an audit reaching back years in the past. It is important to note that the statute of limitations does not apply to cases involving fraud, significant under-reporting of income or the failure to file an IRS tax return.
It is not uncommon for the statute of limitations to come up during the course of an IRS audit. In these cases the IRS will send a letter to the taxpayer asking them to sign a letter waiving the statute. Should the statute of limitations be waived in your IRS audit or should you refuse to sign it? There are times to hold the feet of the IRS auditor to the fire and force them to complete the audit. There are other times when it is in the best interest of the taxpayer to allow that the statute of limitations be waived in order to get a better outcome from the audit or to preserve the ability to recover more on appeal. If you have received a letter from the IRS asking to waive the statute of limitations in your audit do not simply sign it. We invite you to call the experienced IRS audit attorneys at Allen Barron for a free consultation at 866-631-3470.