How Long Does the IRS Have to Audit You?

IRS; Audit;

How Long Does the IRS Have to Audit You?

Some people love surprises, like when you get that perfect gift for Christmas or your birthday that you weren’t expecting in a million years. Some surprises can be a great, like getting more back in your tax return than you were expecting, or receiving a raise at work that you didn’t even ask for. However, not all surprises are pleasant, and in some cases they can be just plain awful, like when you find out the IRS has chosen you for an audit. In fact, what makes that surprise so bad is that it can come at just about any time, especially when you least expect it.

Not Out of the Woods Yet

Did you know that when you file your tax return, and even though the IRS accepts it, it could still be audited up to three years after you file your return? What’s more, in certain situations, the IRS has even longer than three years to stick you with an audit. That’s a surprise no one wants to get. The good news is that typically if the IRS comes knocking after three years they are probably out of luck, but in some cases, they can still demand an audit.

From Three to Six

For example, if you are guilty of forgetting to report, or purposefully leaving out, more than a quarter of your income then the time period doubles from three years all the way to six years. Likewise, if you misreport more than $5,000 of your foreign income then the time limit will also double to six years. If you decide to skip filing a return altogether, then the IRS has no time limit on how long it can seek an audit.

Foreign Accounts Open Longer

Let’s take a look at closer at foreign accounts. When you us a Foreign Bank Account Report (FBAR) to disclose your overseas accounts that usually means the IRS has up to six years to perform an audit. However, if you fail to file a return, or you are guilty of fraud or criminal violations then the time limit can be extended. Some returns with FBARs can actually have no limit at all.

Which Kind of Disclosure?

Although some taxpayers might believe that editing their FBAR or tax return to mend errors would protect them from longer audit-limit times, that depends on which type of disclosure options you choose. Most taxpayers use the Offshore Voluntary Disclosure Program (OVDP) to disclose their offshore accounts. When using the OVDP your case is truly closed after you have signed an agreement with the IRS and the possibility of an audit no longer exists. However for those who choose the streamlined program there is no closing agreement, which means audits are still possible.

Be Honest and Be Prepared

The bottom line is if you want to avoid an audit the best thing you can do is file an honest and accurate tax return every year. Although that won’t guarantee that you will never be audited, it decreases your chances of an audit greatly. Therefore, the next time you file a tax return and receive your refund or pay a penalty, just remember, that doesn’t mean you’re 100 percent off the hook. After all, the IRS can be really good at surprises.

Contact GROCO

If you need help with your taxes to make sure they are accurate, then contact GROCO. Or, if you do ever get notified of an audit, we can help you with that as well. Just call us at 1-877-CPA-2006 or click here to contact us online.

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.


Alan L. Olsen, CPA, Wikipedia Bio is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4 (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

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