Taxpayer Bill of Rights #6: The Right to Finality
The Taxpayer Bill of Rights is a document that highlights the rights that all have when dealing with the Internal Revenue Service (IRS). Each taxpayer needs to know them. In our continuing discussion of them, we arrive at Number 6, The Right to Finality. This involves knowing the time available to challenge an IRS position and how long they have to start an audit or collect a debt.
The IRS usually has 3 years from the date a tax return is filed to assess additional taxes. However, that time frame becomes unlimited if the tax return is determined to be fraudulent. There is a 10 year limit to collect taxes, and that can only be extended as part of a payment agreement or a court order. If the IRS sends a notice that additional taxes must be paid, it will tell you the deadline for when you can file a petition in Tax Court to challenge. This is another way you can determine if a criminal is trying to scam you. Any surprise tax debt that demands immediate payment would be violating this right, and therefore is not coming from the IRS. Normally a tax return is only audited once, but it can be reopened if evidence of fraud is found.