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Crime / Court

September 1, 2011

The IRS has a long reach for back taxes

How many years back can the IRS go in claiming you owe taxes from previous years? Also, do they still only ask you to keep your tax records and supporting documents for seven years?

If no tax return was filed, the IRS can go back for the entire period of delinquency, although they generally, as a matter of policy, stop at six years.

If you did file a return, then IRS has three years from the date the return was filed to do an audit. But, like a lot of things involving taxes, the answer is not quite that simple.

While the IRS generally can include returns filed within the last three years in an audit, if they find a "substantial error," then additional years can be added, up to six years usually.

Substantial error is defined as 25 percent of gross income. If you owe taxes on a return that was filed, but the taxes were not paid, IRS has 10 years from the date of assessment, or filing if no assessment, to collect before the statute of limitations expires.

Yes, it is generally recommended that supporting records be kept for seven years and the actual returns indefinitely. However, again, there's rarely a simple answer and the actual IRS guidelines are spelled out in IRS Publication 552, which is available online.

Please do not take this as tax advice. This is a general interest column. For specific concerns behind your query, consult with a tax advisor.

My divorce is supposedly final, but I was never served court papers. He and I have always lived together and we still do. How could the divorce be final if I never had papers served on me?

There are a couple of ways to address this mystery. Without knowing more here on this end, I'd suggest that you go to the clerk of court's office and ask to look at the file.

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