Full question:
During an IRS examination; Is it legal for them to secretly record the conversation between the examiner and the taxpayer without advising the taxpayer? If different legality (US vs Iowa ) which would apply? Last but not least how far back can they go looking for small mistakes amounting to 2 to 300 dollars in deductions caused by incorrect listing where taxpayer failed to reduce deductions by 50% when occupying part of a duplex in 2004 not intentional fraud; as in falsely or failing to report -income- evasion etc?
- Category: Civil Rights
- Subcategory: Privacy
- Date:
- State: National
Answer:
Generally, there is a 3-year statute of limitations for the IRS auditing a tax return and a 10-year statute of limitations for the IRS collecting tax.
Under section 6501(e) of the Tax Code and section 301.6501(e)-1 of the Tax Regulations the statute of limitations is 6 years if the taxpayer omits additional gross income in excess of 25% of the amount of gross income stated in the tax return filed with the IRS.
If the tax return was prepared by the IRS under the authority of section 6020(b) of the Tax Code the statute of limitations does not apply. See section 6501(b)(3) of the Tax Code and section 301.6501(b)-1(c) of the Tax Regulations.
The statute of limitations does not apply in the case of a false tax return or fraudulent tax return filed with the IRS with intent to evade any tax. See section 6501(c)(1) of the Tax Code and section 301.6501(c)-1 of the Tax Regulations.
For assessments of tax or levy made after November 5, 1990, the IRS cannot either collect or levy any tax 10 years after the date of assessment of tax or levy. See Section 6502(a)(1) of the Tax Code and section 301.6502-1 of the Tax Regulations. Court proceedings must also be started by the IRS within the 10 year statute of limitations. Section 301.6502-1(a)(1) of the Tax Regulations.
The 10 year statute of limitations can be extended by agreement between the taxpayer and the IRS provided the agreement is made prior to the expiration of the 10 year period. See section 6501(c)(4) of the Tax Code and section 301.6501(c)-1(d) of the Tax Regulations.
Under federal law, non-consensual interception of oral and wire communications is restricted to investigations of the felonies listed in 18 USC §2516. That list does not include tax crimes. However, the felonies listed in 18 USC §2516 include 18 USC §1956 and §1957 (money laundering offenses) and offenses for which 31 USC §5322 provides the criminal penalties related to currency reporting offenses.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
