Video: Statute of Limitations Regarding Taxes

In this lesson, Nick Palazzolo, CPA, breaks down the concept of the statute of limitations as it applies to tax matters, clarifying the time frame within which the IRS may pursue taxpayers for audits and additional tax assessments. He brings a bit of levity to the somewhat dreary topic by comparing legal statutes to the grim subjects like death and divorce that also appear in exams. Moreover, Nick elaborates on the normal three-year limit and the circumstances that extend this period, such as an underreporting of income by 25% or more, and delves into the no-holds-barred pursuit in cases of fraud. He concludes with a reminder that despite these time limits, the responsibility to keep accurate records and report correctly endures, emphasizing the importance of maintaining integrity in tax reporting.