Ordinarily, the IRS limits the scope of a potential audit to within three years from the most recent return’s due date or file date, whichever is later. However, this limitation does not apply when there is an allegation of fraud, when no return was filed, or when the taxpayer is charged with a substantial omission or concealment of items of gross income. All audits should thus be taken seriously because they often can trigger other tax years and other tax deductions not originally stated in the audit letter to come under audit.
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