One of the rules that many taxpayers are aware of is the tax audit window. In most cases, the Internal Revenue Service has three years to audit a certain filing. However, that window can be altered if certain requirements are met or if certain circumstances are involved. Still, three years is generally what people know and expect when it comes to an audit of an individual tax filing.

Well, get ready for your expectations to be tweaked a little bit. A six-year window for the IRS to audit a filing just became much more likely after a change to the tax rules — seemingly directed at undermining a Supreme Court ruling that would make six-year windows less likely — allows the IRS to go after you if you had an “omission of gross income” in your filing. The rule change applies to any filing that was sent in after July 31, 2015 or any filing that was still open to an audit previously.


So what does this rule change effectively mean? If you leave out 25 percent of your income, you can be hit under the new six-year window. What constitutes 25 percent of your income? It’s not just your income. It can also apply to property taxes and values, as well as any true mistakes that you may have made in valuation.

Even with this new rule in place, the individual circumstances that apply to you and your filing matter greatly. If you are confused about your tax situation, or if the IRS is taking action against you, consult with an attorney to protect yourself.

Source: Forbes, “IRS Audit Period Just Doubled From Three Years To Six Years For Many,” Robert W. Wood, July 31, 2015

Contact an Estate Planning, Business Law Or Tax Attorney Today

To set up a free, no-obligation consultation with one of our knowledgeable San Diego based estate planning, business and tax lawyers, or learn more about our tax preparation, accounting and business advisory services call us at 866-631-3470 or contact us.