Post by sandi66 on Mar 29, 2011 6:50:47 GMT -5
John Bullis: What is the ‘statute of limitations?'
Tuesday, March 29, 2011
A part of the tax law is the “statute of limitations.” That is the limit of how long a tax return is open for audit by IRS or for amendment by the taxpayer.
Like all tax laws, there are some general rules and various exceptions.
The basic rule is IRS can audit or taxpayer can amend a return for three years from the later of: (a) Three years after filing or (b) Three years from the due date of the return.
For example if the Individual Income Tax Return for the year 2010 is filed March 30, 2011, the “later of” is three years from April 18, 2011, the due date for filing that return.
If the return is filed June 1, 2011, then the “open for audit” time is three years after filing or June 1, 2014.
Someone said they wanted an attorney that only had one hand. They were tired of hearing “on one hand” and then “or on the other hand…”
If the return omits 25 percent or more of gross income, then the statute of limitations is six years instead of three years.
If the return is never filed or involved fraud, the statute of limitations is always open … it never closes.
Some folks have filed income tax returns even if there is no tax to pay-just to start the statute of limitations closing. That is particularly helpful in the case of U.S. Gift Tax Returns, form 709.
If the decision is to not file the return because no tax is owed, then it is important to save the information to be able to show that no tax is owed for that year or return.
It is good to have the statute of limitations rules to give some peace of mind and let the tax matters be closed in a reasonable time.
There are new cases and rulings on the application of the statute of limitations every year. If you have a question about how it applies in your situation, ask your CPA firm.
Did you hear “The fellow who invented the Life Saver really made a mint” by Gordon Yardy?
• John Bullis is a certified public accountant, personal financial specialist and certified senior adviser serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.
www.nevadaappeal.com/article/20110329/NEWS/110329595/1001&parentprofile=1058
Tuesday, March 29, 2011
A part of the tax law is the “statute of limitations.” That is the limit of how long a tax return is open for audit by IRS or for amendment by the taxpayer.
Like all tax laws, there are some general rules and various exceptions.
The basic rule is IRS can audit or taxpayer can amend a return for three years from the later of: (a) Three years after filing or (b) Three years from the due date of the return.
For example if the Individual Income Tax Return for the year 2010 is filed March 30, 2011, the “later of” is three years from April 18, 2011, the due date for filing that return.
If the return is filed June 1, 2011, then the “open for audit” time is three years after filing or June 1, 2014.
Someone said they wanted an attorney that only had one hand. They were tired of hearing “on one hand” and then “or on the other hand…”
If the return omits 25 percent or more of gross income, then the statute of limitations is six years instead of three years.
If the return is never filed or involved fraud, the statute of limitations is always open … it never closes.
Some folks have filed income tax returns even if there is no tax to pay-just to start the statute of limitations closing. That is particularly helpful in the case of U.S. Gift Tax Returns, form 709.
If the decision is to not file the return because no tax is owed, then it is important to save the information to be able to show that no tax is owed for that year or return.
It is good to have the statute of limitations rules to give some peace of mind and let the tax matters be closed in a reasonable time.
There are new cases and rulings on the application of the statute of limitations every year. If you have a question about how it applies in your situation, ask your CPA firm.
Did you hear “The fellow who invented the Life Saver really made a mint” by Gordon Yardy?
• John Bullis is a certified public accountant, personal financial specialist and certified senior adviser serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.
www.nevadaappeal.com/article/20110329/NEWS/110329595/1001&parentprofile=1058