how far can the irs go back for an audit

The IRS generally has a three-year statute of limitations to conduct an audit, but this timeframe can be extended in certain situations. Here are some general guidelines:

1. Three-year statute of limitations: The IRS typically has three years from the date you filed your tax return to initiate an audit. This means that if you filed your 2020 tax return on April 15, 2021, the IRS would have until April 15, 2024, to start an audit.
2. Six-year statute of limitations: If the IRS suspects that you have underreported your income by 25% or more, they can extend the audit period to six years.
3. No statute of limitations: If the IRS suspects that you have committed tax fraud or willfully failed to file a tax return, there is no statute of limitations for an audit.
4. Extended statute of limitations: If you agree to extend the statute of limitations, the IRS can conduct an audit beyond the original three-year period. This is usually done in writing, and you should carefully consider the implications before agreeing to an extension.
5. State tax audits: State tax authorities may have different statutes of limitations for audits, which can range from three to six years or more, depending on the state.

It’s essential to note that the IRS can also conduct audits based on information received from third-party sources, such as:

• Information Document Requests (IDRs): The IRS can request information from third parties, like banks or employers, to verify the accuracy of your tax return.
• Whistleblower tips: The IRS can receive tips from whistleblowers, which can lead to audits.
• Automated Underreporter Program (AUR): The IRS uses computer programs to match income reported on tax returns with information from third-party sources, like W-2s and 1099s.

To minimize the risk of an audit, it’s crucial to:

• Keep accurate records: Maintain detailed records of your income, expenses, and tax-related documents.
• File accurate tax returns: Ensure that your tax returns are accurate and complete.
• Respond promptly to IRS inquiries: If you receive a notice from the IRS, respond promptly and provide the requested information.

Remember, the IRS can conduct audits randomly, so it’s essential to be prepared and maintain accurate records to support your tax returns.