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How Far Back Can IRS Audit

How Far Back Can IRS Audit?

Have you ever wondered how far back can IRS audit after you file your taxes? The response depends on several things. The Internal Revenue Service (IRS) typically examines tax returns from the previous three years. This is the typical window.

If the iRS discovers a significant mistake, it can go back even further. In some situations, it can audit for more years, usually no more than six years.

For some circumstances, there is no time restriction. This includes:

  • Unfiled taxes
  • Fraudulent returns
  • Unreported overseas income exceeding $5,000.

Beyond the Statute of Limitations

For audits, the IRS adheres to a statute of limitations. It is the period within which they can levy extra taxes. However, there are several exclusions:

Never Filed a Return

The audit may occur at any moment if you fail to file.

Unsigned Return

The IRS views an unsigned return as not being submitted.

Fraudulent Return

The time restriction is eliminated if the IRS detects fraud.

What Triggers an Audit?

Even if audit selection isn’t always random, various warning signs may increase your odds:

Missing Income

An audit may be initiated if income on a 1099 form is not reported.

High Income

Auditors conduct more frequent audits of those with higher incomes.

Large Charitable Deductions

The IRS may investigate donations of pricey goods.

Mathematical Errors: The IRS may pay attention to errors in or against you.

Excessive Deductions

A claim for much higher than average deductions may be subject to investigation.


Audits are more common in companies with high cash transaction volumes.

Home Office Deduction

The IRS may thoroughly review, but tight requirements exist.

Business Expenses

Uncertainty or inadequate documentation of travel, dining, and entertainment costs may cause concern.

Claiming a Hobby as a Business

The IRS will investigate whether or not your pursuits qualify as a business.

100% Business Vehicle Use:  Using a 100% business vehicle is an uncommon deduction that requires well-supported paperwork.

Earned Income Tax Credit (EITC)

These returns are scrutinized more frequently due to a greater mistake rate.

Click here to learn more about IRS & state audit representation.

What to Do During an Audit?

Learning how far back can IRS audit helps you prepare for prospective audits. Prepare to present supporting paperwork for your tax claims in the event of an audit. Some examples are:

  • Bills
  • Receipts
  • Court documents
  • Loan agreements

The IRS may also require company logs, medical records, and other pertinent papers, depending on the audit.

The actual audit may take weeks to two years, depending on your participation and the level of intricacy.

Audit Outcomes

Three options exist for how an audit might end:

No Change

Your tax return won’t be altered if you have the proper paperwork for everything.

Agreed Changes

If you accept the IRS’s proposed changes, you will be responsible for paying any additional taxes due.

Disagreed Changes

If you are unhappy with the IRS’s conclusions, you can file an appeal or get expert assistance in negotiating with the agency.

How Can You Avoid an Audit in the Future?

It is vital to maintain organization with your tax records and books. To guarantee everything is documented correctly and prepare your taxes, our tax specialists are here to assist you. Retaining any tax-related documents for at least three years is also a good idea.

The Bottom Line

Now you have learned how far back can IRS audit!

Even if you expect a refund or owe taxes, timely filing helps deter the IRS from focusing on you unnecessarily. You can feel more confident when facing audits in the future if you are organized and maintain accurate records.