Amended Income Tax Returns and the Statute of Limitations

Amended tax returnGenerally, the IRS has three years to audit a tax return, as we discussed in our previous article “Time Limit for Filing an Amended Income Tax Return”. Filing an amended tax return does not restart that three-year statute of limitations.
If your amended tax return shows an increase in tax, and you submit the amended tax return within 60 days before the three-year statue runs, the IRS has only 60 days after it receives the amended return to make an assessment. This narrow window can present strategic opportunities. For example, some taxpayers amend a return right before the statute expires.
If your amended tax return does not report a net increase in tax, it does not trigger any extension of the statute of limitations. Example: You file your 2008 return on April 15, 2009, claiming a $1,700 refund, which you receive. On March 15, 2012, you file an amended 2008 return claiming additional deductions for mortgage interest you forgot to claim on your original return, netting you another $2,500 refund. One month later, April 15, 2012, the IRS’ three-year statute of limitations expires. The IRS does not get more time to audit your return because there was no increase in tax shown on your amended return.
Your tax preparer can provide you with more information regarding amendments to your income tax return. StrataTax, a San Diego consulting and tax services firm, is available year-round and will provide you with a free review of your previously filed tax returns. Our CPA and Former IRS Auditor is skilled at finding deductions and credits that other tax preparers and tax software miss. Call us at (858) 225-7720 to setup your free initial consultation or visit us at for more information.
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