You open your mail just to find out, you have received a notice from the IRS informing you that you are being audited. What now? How long will this stressful process last? Weeks, months, years?
While every person’s IRS audit will be different, in general, most audits will last less than a year. There is also good news pertaining to the timeline of your audit! There is a time limit, this is referred to as the statute of limitation. This timeline expresses how long the IRS has o take action to charge or assess your additional taxes on the return that you are being audited for. The statute of limitation expires three years after the due date of the return, or the date you filed it, depending on which came later.
This means, if you file your taxes on April 17, 2018, that statute of time for the IRS to make their move will end on April 17, 2021.
While the IRS does have 3 years in order to wrap up their investigation, like previously stated, it is rare that the audit will go beyond one years time. This is because the IRS tries to address audits quickly in order to close their audit well before the deadline so that they are able to seek justice and receive whatever amount of money they believe is owed to them.
However, it is important to note, in the rare situation that tax fraud has been committed, the IRS does not have a statute of limitations. Whenever there is a large amount of unreported income discovered, the statute becomes six years. It is rare that the IRS will go into an audit assuming they need to extend the statute to six years instead of the original three. The IRS typically assumes that three years is the limit, and the assigned auditor will generally work to complete the audit within that timeline.
The type of audit is also important when establishing the timeline for the process. Below are the three types of audits brought on by the IRS:
These audits are usually quick and straightforward. The IRS does these audits through the mail, generally notifying taxpayers within seven months of filing. Mail audits usually wrap up within three to six months, depending on the issues involved and how quickly and completely you respond to the audit letter.
These types of audits usually move quickly. You, or your tax expert, will meet with the IRS agent at an IRS office. The IRS usually starts these audits within a year after you file the return, and wraps them up within three to six months. But expect a delay if you don’t provide complete information or if the auditor finds issues and wants to expand the audit into other areas or years.
These types of audits can last up to a year, or more if there are issues. In field audits, the IRS meets with you (or your tax pro) at your business or home. The IRS usually starts these audits within a year after you file the return, and they often last about a year.
Sandra King Enrolled Agent
Sandra King is an enrolled agent, empowered by The United States Treasury to prepare your personal or business tax filing. While her services are offered nationwide, Sandra King locally serves the greater Dallas-Fort Worth area, including but not limited to Arlington, Bedford, Colleyville, Euless, Fort Worth, Grand Prairie, Hurst, Mansfield, North Richland Hills, and Richland Hills.