Nobody wants to spend their whole life looking over their shoulder, wondering if they’re going to be audited by the IRS.

Luckily, there is a statute of limitations on IRS audits and tax assessments. This time period is called the Assessment Statute Expiration Date (ASED).

The IRS must close the audit and impose any tax assessments imposed before the ASED expires. Any payment of tax that was assessed after the ASED expired is an overpayment that the IRS must credit or refund.1

You may have heard that the statute of limitations on audits is three years. This is generally the case, but not always. Depending on the circumstances, the IRS could have far longer to audit your return . . . and sometimes forever.

Let’s look at the main limitations periods.

Three Years

The general rule is that the IRS has a maximum of three years to audit your return and impose a tax assessment.2 The three-year period starts to run on the later of3

the due date of the return (usually April 15 or March 15 for calendar-year taxpayers), or

the day you actually file your return.4

Thus, if your return is due ... Log in to view full article.