How Far Back Can The IRS Go

Updated July 16, 2015
How far back can the IRS go?
How far back in time can the IRS audit?
Three Year Rule
The period or Statute of Limitations at the Federal level which allows them to audit you without cause, begins on the date that you file your federal return and extends 36 months or three years. This means that you must keep the returns and all documentation substantiating income and deductions for at least that period.
Six Year Rule
If you under-reported your income by at least 25%, they can audit back six years rather than three without showing cause to a Federal Judge.
Seven Year Rule
If you had a claim for worthless securities on your return, they can go back seven years.
The Unlimited Rule
If the Fed’s can prove that you filed a fraudulent return, then there is no time limitation. They can go back as far as they would like.
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Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals.