Statute of Limitation

Statute of Limitation for Tax Carryovers

It is not unusual for a taxpayer to make an error on a return that results in a misstatement of a net operating loss or a credit that is then carried forward. These mistakes might not be noticed until after the statute of limitation is closed.

Special Deadline: Filing Amended Returns Reporting Tax Due Within 60 Days of Assessment Limitation

When a taxpayer files an amended return reporting additional tax within 60 days before expiration of the assessment limitation period, Sec. 6501(c)(7) provides that the period within which the IRS can assess the additional tax does not expire before the 60th day after the day on which it receives the amended return. This extension of the assessment limitation period applies only to the additional tax reported on the amended return.

Tax Court Reforms Statute-of-Limitation Extensions

The Tax Court found that the IRS and the taxpayers made a mutual mistake on Forms 872, Consent to Extend the Time to Assess Tax, regarding the tax years for which the statute of limitation on assessment was being extended and reformed the forms to apply to the years that the IRS and the taxpayers intended to extend.

Six-Year Statute of Limitation Applies to Assessment

The Tax Court held that the six-year statute of limitation of Sec. 6501(e)(1)(A) applied to an assessment of tax based on a distribution from an ESOP because the taxpayer had not adequately disclosed the distribution on his tax return.

Statute of Limitation Tolled by Fraudulent Tax Returns

The Second Circuit held that the filing of fraudulent tax returns for a corporation by an accountant to embezzle money that was owed to the IRS was an intentional evasion of taxes that tolled the statute of limitation on assessment.

Superseding Return Filed on Extended Due Date Starts SOL

Editor: John L. Miller, CPA The general statute of limitations (SOL) for assessment found in Sec. 6501 gives the IRS three years to assess tax after a return has been filed, beginning on the date that a valid Federal tax return is deemed filed. A return filed prior to the

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