How Far Back Can the IRS Audit?
The IRS generally includes returns filed within the past three years in an audit. However, if the IRS discovers a significant error during the audit process, it may audit additional prior years. It is rare for the IRS to go back more than six years in an audit.
The IRS statute of limitations for an audit is six years, though there are tax issues for which there is no statute of limitations. For instance, if you fail to file the proper form, relating to foreign income, inheritances, or gifts over $100,000, there is no time limit for an audit.
You should be aware of a couple of other exceptions, too. There is no IRS audit statute of limitations if you have never filed a tax return, and if you forget to sign your return, the IRS can consider it not filed. The same holds true if a fraudulent return was filed in the past.
The IRS wants to see documentation supporting your claims. It may request that you provide certain records. Such records might include:
Bills
Cancelled checks
Legal papers
Loan agreements
Receipts
Depending on the reason for the audit, the IRS may want to see medical and dental records, tickets for business use, logs or records, or other relevant documents.
When facing a tax audit, you should enlist the help of an expert who can help you navigate the system. Seek out a tax professional such as an enrolled agent, CPA, or tax lawyer for tax advice.
If you’re worried about an audit, your books are the first thing you’ll want to get in order. We can help. We specialize in helping small business owners in the design industry who have fallen behind in their bookkeeping and can help you get your accounts in order so you’re better equipped to resolve any tax problems. Book a call with us today!
