Time limits for IRS to strat tax retrun investigation

[dilberts9]

What is the name of your state? Texas

Once a person submits his/her 2022 tax returns (say, by middle of April 2023), if IRS has any suspicions about his/her income or invasion, etc., how soon (within how many weeks or months or years) IRS comes after that person for investigation? and how late (after how many weeks or months or years) IRS comes after that person for investigation? Is there any normal time frame within which IRS starts this investigation once taxes are filed by a person?

 

[adjusterjack]

Nope. Not normal. Could be a couple of years.

The two times in my life that I was audited long ago, they came at about two years after I filed.

Earlier this year I was still dealing with an IRS error from 2019.

Post-Covid it may take years for the IRS to catch up.

Besides, the odd of actually getting audited are rather slim unless you have done something that raises a red flag. Did you?

 

[LdiJ]

What is the name of your state? Texas

Once a person submits his/her 2022 tax returns (say, by middle of April 2023), if IRS has any suspicions about his/her income or invasion, etc., how soon (within how many weeks or months or years) IRS comes after that person for investigation? and how late (after how many weeks or months or years) IRS comes after that person for investigation? Is there any normal time frame within which IRS starts this investigation once taxes are filed by a person?

They have three years to audit under normal circumstances, but can go to 7 years or even longer if they can establish potential fraud. I do not know whether or not the backup caused by the pandemic will give them any leeway to extend the 3 years or not.

Since you are talking about 2022 taxes that you obviously haven't filed yet, I would think long and hard before contemplating something that you know is wrong, because that could lead to potential fraud.

 

[davew9128]

Normal statute is three years, extends to six for substantial understatement, and doesn't exist if there is fraud. That said, its a curious question to ask on a return not yet due.

 

[Taxing Matters]

What is the name of your state? Texas

Once a person submits his/her 2022 tax returns (say, by middle of April 2023), if IRS has any suspicions about his/her income or invasion, etc., how soon (within how many weeks or months or years) IRS comes after that person for investigation? and how late (after how many weeks or months or years) IRS comes after that person for investigation? Is there any normal time frame within which IRS starts this investigation once taxes are filed by a person?

Your question is not very specific. I assume you are asking about your personal income tax returns, right? Are you talking about the amount of time the IRS has to propose additional tax after the return is filed, or how long the IRS/DOJ have to start prosecution of tax crimes? Either way it's not as easy to give a specific answer this as you might think because there are a number of statutes of limitation (SOL) that apply to federal taxes depending on the particular kind of tax and what it is that the taxpayer did or failed to do. Furthermore there are a number of events that extend (toll) the SOL. For example, if you file bankruptcy before the SOL expires, that bankruptcy will extend the time the IRS has to propose additional tax or to collect any tax that has been already assessed.

First thing to know, which the prior responses did not touch on because you didn't ask, is that there is no SOL for assessment of the tax if no return was filed. The SOL for assessment starts to run the later of (1) the due date of the return or (2) the date the return is actually filed. So if the deadline to file is April 15 and you file early on February 12, as davew9128 point out, the IRS would have 3 years from April 15 to assess the additional tax, or 6 years from that date for a substantial understatement. On the other hand, if you filed late on July 17, the three (or six) years would start to run on July 17. There is no SOL for civil fraud, so if the IRS determines there was fraud on the return it may assess the tax related to that fraud at any time, even decades later. Again, these are just the general rules. There a number of things that could in particular situations have a different SOL to assess the tax.

The basic rule for criminal tax evasion and most other federal tax felony crimes is that the government has 6 years to begin prosecution. For most federal tax misdemeanor offenses, the SOL is 1 year.

Note that in many states you also have to consider that the state will have extra time beyond what the IRS has to assess any delinquent state income tax and the state's time frame for criminal prosecution may be quite different from the federal rule. Since your federal return often becomes a part of your state return, too, fraud on your federal return could result in fraud for the state return as well.

 

[dilberts9]

I am inquiring about my personal tax returns. In year 2021, I opened a checking account in two different banks and deposited 3 thousand dollars cash in each of them, and after few days, I deposited another 6 thousand dollars in each of them. When I was depositing 6 thousand cash, in one of the banks, the employee asked me to show my driver license saying the system is asking for that. All this money is my earned income from year 2010 for which I paid taxes in my tax returns filed in year 2011.

I filed my year 2021 tax returns in April 2022. I am just concerned if and when IRS will conduct an investigation because of the above matters.

Texas has no state income tax and I am concerned of IRS only.

 

[LdiJ]

I am inquiring about my personal tax returns. In year 2021, I opened a checking account in two different banks and deposited 3 thousand dollars cash in each of them, and after few days, I deposited another 6 thousand dollars in each of them. When I was depositing 6 thousand cash, in one of the banks, the employee asked me to show my driver license saying the system is asking for that. All this money is my earned income from year 2010 for which I paid taxes in my tax returns filed in year 2011.

I filed my year 2021 tax returns in April 2022. I am just concerned if and when IRS will conduct an investigation because of the above matters.

Texas has no state income tax and I am concerned of IRS only.

That is a bit of a different question than the one you originally posed. Whether or not the IRS will question your bank deposits is something that is difficult to predict. You are not talking about a really serious amount of money, therefore in my opinion, it is honestly not particularly likely.

 

[davew9128]

I am inquiring about my personal tax returns. In year 2021, I opened a checking account in two different banks and deposited 3 thousand dollars cash in each of them, and after few days, I deposited another 6 thousand dollars in each of them. When I was depositing 6 thousand cash, in one of the banks, the employee asked me to show my driver license saying the system is asking for that. All this money is my earned income from year 2010 for which I paid taxes in my tax returns filed in year 2011.

I filed my year 2021 tax returns in April 2022. I am just concerned if and when IRS will conduct an investigation because of the above matters.

Texas has no state income tax and I am concerned of IRS only.

You know there are black helicopters in Texas right?

 

[dilberts9]

My sincerest thaaaanks