Tolling Tax Statutes of Limitations: Collections, Refund Claims, IRS Audits, and the Right to Finality

There are many tax statutes of limitations, and although many work against the taxpayer, many can work in the taxpayer's favor. Included as No. Six in the Taxpayer's Bill of Rights is the Right to Finality. As explained by the IRS, "Taxpayers have the right to know the maximum amount of time they have to challenge the IRS's position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit."

A taxpayer's delinquent tax bill could be canceled if the 10-year statute on collections passes without the IRS collecting the balance due. Most are aware that the IRS generally has three years from the date a taxpayer files his return (or original due date) to assess the additional tax due. More confusing is the refund claim statute, which says you must file a claim within three years of the filing date or two years from the date you paid tax (whichever is later) to receive a refund.

Filing false or fraudulent tax returns can extend relative statutes. Tax practitioners must understand the maximum amount of time the IRS has to assess and collect tax and the maximum amount of time taxpayers have to challenge an IRS position, as well as what extends these critical deadlines.

Listen as our panel of tax professionals outlines what tax preparers need to know about taxpayers' rights to finality and the many tax statutes of limitations.

1. Statutes of limitations: an overview
2. Ten-year collections statute
3. Three-year assessment statute
4. Statute for refund claims
5. Statutory notices of deficiency
6. Fraud
7. Voluntary and non-voluntary statute suspensions
8. Ensuring the statute runs: case studies
9. Recent cases
10. Right to finality

The panel will explain these and other critical issues:

• Specific situations where practitioners may want to ensure a statute tolls
• When, and when not, to voluntarily extend the statute of limitations
• How the 10-year collection statute can work in a taxpayer's favor
• The timeframe for filing a refund claim
• How taxpayers' right to finality impacts an IRS audit

Learning Objectives

After completing this course, you will be able to:

• Identify common situations when you may want to ensure the running of the statute
• Determine the timeframe for filing a refund claim
• Decide how underreporting income can affect the filing statute
• Ascertain when the statute of limitations generally runs on collections

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of individual income taxation, including itemized deductions, individual income tax credits, net operating loss limitations including carrybacks and carryforwards.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).