You filed your return. You paid what you owed. And after three years passed, you assumed that chapter of your tax life was closed for good.
But what if it never really closed at all?
Under a little-known interpretation of the fraud exception to the statute of limitations, misconduct by your tax preparer—not you—can keep an IRS audit window open indefinitely.
In some courts, it doesn’t matter that you never intended to cheat, never knew anything was wrong, and relied entirely on a licensed professional to get it right.
This article walks through a recent case in which the IRS audited a tax return filed in the 1990s (27 years ago), asserting massive tax, penalties, and interest based solely on a preparer’s fraud.
It explains why “I didn’t know” failed in Tax Court and before the U.S. Court of Appeals for the Third Circuit; how tax preparer fraud can be imputed to you, the taxpayer; and what you should be doing now to keep decades-old tax returns from coming back to life. ... Log in to view full article.
