Tax Analysts provides news, analysis, and commentary on tax-related topics, including the latest developments regarding statutes of limitations in tax law.
A statute of limitations sets a time after which rights cannot be enforced by legal action. The federal Internal Revenue Code contains many and varied statutes of limitations. The rules of assessment of taxes are found primarily in section 6051.The IRS generally has three years from the due date of a return or the filing of the return to assess taxes; however, in the case of a substantial omission of gross income on the return, this period is extended to six years. What exactly is an “omission” was before the Supreme Court in Home Concrete & Supply, which held that an overstatement of basis was not an omission; subsequently, section 6051(e)(1)(B)(ii) was amended to state that overstatement of unrecovered cost or other basis is such an omission.
Other statutes of limitation that are particularly relevant in the Internal Revenue Code are the various times to file for innocent spouse relief under section 6015, penalties of many kinds, refund suits under sections 6511 or 7422, recovery of erroneous refunds under section 7405, and limitations for suits in general (section 6532).
As varied as the timeframes are within the federal framework, the issues multiply when taking into consideration state laws and foreign jurisdiction laws. Tax Analysts consistently and promptly publishes all relevant developments regarding statutes of limitation on taxes, whether federal, state, or international.