US v. Home Concrete Reinforces IRS' Limited Audit Authority - John R. Dundon II, Enrolled Agent
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US v. Home Concrete Reinforces IRS’ Limited Audit Authority

26 Nov US v. Home Concrete Reinforces IRS’ Limited Audit Authority

Posted at 00:00h in Basis, IRS Audit, Tax Court by
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Generally, the IRS has a three year statute to audit a return. However this changes to six years if there is a substantial understatement of income, when 25% of more of gross income is omitted. The definition of what it means to omit gross income is often up for debate as shown by numerous tax court cases.

In a recent court case, United States v. Home Concrete & Supply, the Supreme Court decided that despite overstated basis, the IRS can only audit the last three years.

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