Three-year Statute of Limitations

• Generally, Internal Revenue Code 6501(a) governs the statute of limitations on tax returns. This applies in all noncriminal cases where taxpayers actually file returns. The three-year clock starts when the return is due (disregarding extensions), or the IRS receives the return, whichever is later.
  
  

Omissions

• Where the return omitted more than 25 percent of gross income, but there is no accusation of fraud or willful tax evasion, a six-year statute of limitations applies under IRC 6501(e).
  
  

Exceptions for Fraud and Failure to File

• IRC Section 6501(c) provides for the following exceptions: fraudulent returns with the intent to evade tax (false returns), willful attempt to evade tax or failure to file. The code allows the IRS to assess penalties for these cases at any time.