What is the name of your state? PA
abezon, I was viewing some of the previous posts on this site, and following some of the threads, and came across one that made me a little curious. In one of your responses on 2-12 to Saville concerning IRS audits you stated, "The IRS can re-open the statue of limitations beyond the 3-year limit if (1) the taxpayer owed taxes and paid them after the due date of the return, (2) the taxpayer filed an extension, or (3) the IRS can show that the taxpayer committed fraud during some tax year that is still open, and they have reason to suspect that this fraud has been going on for more than 3 years."
Here's my question. If the IRS can show that the taxpayer committed fraud during some tax year that is still open, and they have reason to suspect that this fraud has been going on for more than 3 years, how far back can they go? Is it the 5 years that you mention in one of your responses? I ask this because several years ago (3 or 4) one of the jewelers in our city was audited, and the rumor was that the IRS went back something like 10 years. I can't remember the exact number of years they went back because it's been some time since this happened, and everything I heard was based on rumor, anyway.
What is the current law in such a situation? How many years can they go back if fraud is suspected? Is there a limit?
Thanks in advance for answering.
abezon, I was viewing some of the previous posts on this site, and following some of the threads, and came across one that made me a little curious. In one of your responses on 2-12 to Saville concerning IRS audits you stated, "The IRS can re-open the statue of limitations beyond the 3-year limit if (1) the taxpayer owed taxes and paid them after the due date of the return, (2) the taxpayer filed an extension, or (3) the IRS can show that the taxpayer committed fraud during some tax year that is still open, and they have reason to suspect that this fraud has been going on for more than 3 years."
Here's my question. If the IRS can show that the taxpayer committed fraud during some tax year that is still open, and they have reason to suspect that this fraud has been going on for more than 3 years, how far back can they go? Is it the 5 years that you mention in one of your responses? I ask this because several years ago (3 or 4) one of the jewelers in our city was audited, and the rumor was that the IRS went back something like 10 years. I can't remember the exact number of years they went back because it's been some time since this happened, and everything I heard was based on rumor, anyway.
What is the current law in such a situation? How many years can they go back if fraud is suspected? Is there a limit?
Thanks in advance for answering.