6

The Right to Finality

Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year. Taxpayers have the right to know when the IRS has finished an audit.

What This Means for You

  • In order to timely challenge a statutory notice of deficiency in Tax Court, you must file your petition within 90 days of the date of the statutory notice of deficiency or 150 days if the taxpayer’s address on the notice is outside the United States or if the taxpayer is out of the country at the time the notice is mailed. If you do not timely file a petition, the amount proposed in the statutory notice will be assessed and you will receive a bill. IRC § 6213

    For more information about filing a petition, see the United States Tax Court’s taxpayer information page.

  • If you receive a notice proposing additional tax (statutory notice of deficiency), the notice must include the deadline for filing a petition with the Tax Court to challenge the amount proposed. IRC § 6213(a)

  • The IRS generally has three years from the date your return was filed to assess the tax. There are some limited exceptions to the 3-year rule, such as not filing a return or filing a fraudulent return. IRC § 6501

  • The IRS generally has ten years from the assessment date to collect unpaid taxes from you. However, there are a number of circumstances where the ten year collection period may be suspended, such as during the period when the IRS cannot collect, e.g., bankruptcy or a collection due process proceeding, or an offer in compromise is pending. IRC § 6502

  • If you believe you have overpaid your taxes, you can file a refund claim asking for the money back. Generally, you must file a refund claim within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. IRC § 6511

    See also IRC § 6402: Administrative claim for refund under the Right to Pay No More than the correct amount of tax.

  • If you or the IRS does not file a timely appeal, the decision of the U.S. Tax Court is final. IRC § 7481

  • Generally, you will only be subject to one examination per taxable year. However, the IRS may reopen a taxable year that has been previously examined if the IRS finds it necessary (e.g., there is evidence of fraud). IRC § 7605(b)