In: Accounting
9) For the 2019 tax returns, indicate when the statute of limitations expires and why. a. Phoenix filed his tax return on February 28, 2020. b. Jill and Randy filed their tax return on August 16, 2020. c. Although required to file, Catherine chose not to file a tax return this year because she was expecting a tax refund and could not pull together all the information needed to file the return. d. Jerry filed his tax return on May 22, 2020, but has accidentally underreported his taxable income by 30 percent.
The statute of limitations in general expires after three years. That is they should keep till three years from the due date of the return or the date on which it was filed, whichever is later.
Here he has to keep till April 15 ,2023
The statute of limitations in general expires after three years. That is they should keep till three years from the due date of the return or the date on which it was filed, whichever is later.
Here they have to keep till August 16,2023
There will be no time limit on IRS action, but heightened interest fees and penalties will apply. Over here Catherine will have to keep records indefinitely as she chose not to file tax return.
The IRS can go back six years for an audit if taxable income is under-reported, i.e. gross income is under-reported by 25 percent or more.
Here Jerry has underreported by 30%,he will have to maintain till May 22,2026