What is the IRS Audit Statute of Limitations?

Wondering if you're at risk of being audited? Generally, if you don't receive an initial audit contact letter within 18 months after filing, you're probably in the clear. The IRS audits most returns fairly quickly after they're filed, but by law, the agency has three years and even longer in select situations.

The IRS has three years to audit most returns, but the agency can take up to six years if you don't report 25% or more of your income, and forever in cases of fraud. The window is called the audit statute of limitations, and its last day is the Assessment Statute Expiration Date (ASED) -- that's because the last day the IRS can audit is also the last day the agency can assess tax related to that return against you. Understanding the audit rules can help you get peace of mind and understand what to do if you make a mistake or are contacted about an audit. 

To get help now, use TaxCure to find audit representation in your area, or keep reading for more details.

Key takeaways

• Audit statute of limitations starts the day you file, or the return due date if you file early.
• The statute period runs for three, six, or unlimited years, depending on the situation.
• The last day is called the assessment statute expiration date or ASED.

How to Determine the Audit Statute of Limitations

The statute of limitations determines how long the IRS has to audit your tax return. This time period starts on the day you file your return, but if you file your return early, the clock starts running on the return's original due date. For example, your 2025 individual income tax return is due April 15th, 2026. If you file early on March 1, 2026, the audit statute of limitations period begins on April 15, 2026. If you file late, say on December 1, 2026, the clock starts on that date. 

Now, how long does the IRS have from that date to audit your return? The standard time frame is three years, but there are exceptions. 

• 3 Years: The standard amount of time that the IRS has to legally audit most tax returns. 
• 6 Years: If the income on the tax return was understated by 25% or more -- for example, your return reports $75,000 in income but you really earned $100,000 or more.
• Unlimited: If the tax return was filed with the intent to commit fraud. 

The IRS may also apply the six-year audit rule in the following situations:

• Basis overstatement -- If a basis overstatement leads to you effectively not reporting 25% or more of your income. For example, let's say, for the sake of simplicity, that the only item on your return is a property sale. You sold the property for $1 million and claim that its basis (the purchase price, plus major repairs, minus depreciation) is $600,000, so your taxable gain is $400,000. However, your actual basis is $200,000, and your gain should have been $800,000. Since you didn't report half of your income, the IRS can audit for six years. If they determine that you underreported the basis due to fraud, they can audit for an unlimited amount of time. 
• Foreign income, gifts, and assets - If you fail to report more than $5000 of foreign income. The IRS also has six years to audit FBARs, Form 3520 to report foreign gifts, and Form 8938 to report foreign assets under FACTA. If you don't file these forms, the clock never starts.

In addition to cases of fraud, the IRS also has unlimited time to audit returns in the following cases:

• Failure to file Form 5471 - The IRS has unlimited time to audit your full return if you fail to file this form, which reports your ownership in a foreign corporation.
• Alteration of the "penalty of perjury" language -- if you cross out this language or fail to sign your return, the IRS has unlimited time to audit.

Can the audit statute of limitations be extended or tolled?

Aside from income understatement, fraud, or cases related to foreign income, gifts, or assets, the IRS may extend the audit timeline if you agree in writing to extend it -- always talk with a tax professional before signing this type of agreement. The IRS may also toll (pause) the clock and extend the timeline if you're out of the country or if the agency sends a John Doe summons related to you or your return. 

For example, say that you sold crypto and the IRS sent a John Doe summons to the crypto exchange to get a list of all of their clients. Your name appeared on the list, and due to that connection, the IRS was able to toll the statute of limitations and take extra time to audit your return. Sometimes, the IRS can extend the statute of limitations to audit a specific type of return -- for instance, the agency extended the audit statute timeline on payroll returns with Employee Retention Credits (ERC).

How long does the IRS have to audit business tax returns?

The agency uses the same timeline and rules for most business tax returns -- for example, if you file a corporate income tax return, the IRS may have three, six, or unlimited years to audit it. However, the calculations are a bit different for payroll tax returns. Although the quarterly returns are due throughout the year, the audit time clock doesn't start until April 15 following the year these returns are filed, and then, it runs as usual. 

For example, your 2025 quarterly payroll tax returns are due on April 15, 2025, July 15, 2025, October 15, 2025, and January 15, 2026, but the audit time clock doesn't start until April 15, 2026. In other words, the IRS has until April 15, 2029, to audit the quarterly return that was due on April 15, 2025, as well as the other three returns.

How long does the IRS have to audit unfiled returns?

If you don't file a return, the clock never starts running. There is no statute of limitations on unfiled returns. Theoretically, the agency can go back to any tax period to assess tax against you if you don't file a return. However, that typically only happens in cases where the agency thinks you may have committed fraud or tax evasion. In most cases, if you're years behind and you want to get back into compliance, you only need to file the last six years' of returns.

Does filing old returns increase the risk of an audit?

No, the IRS is not any more likely to audit a late return than a return that was filed on time. If you're years behind on filing tax returns, you should not worry that catching up will increase your audit risk. In fact, contrary to common misbeliefs, filing old returns can actually help you because it starts the assessment statute of limitations, which never starts if you don't file anything.

How long does the IRS have to audit an amended tax return?

The original assessment statute expiration date applies to amended tax returns. However, if you amend a return that shows an increase in tax within 60 days before the ASED, the IRS gets an additional 60 days to audit it. For example, say that you file your 2025 tax return early or on time. The IRS has until April 15, 2029, to audit it (unless one of the exceptions for a longer time period applies).

Now, imagine that you amend the return on January 10, 2029; the agency still must audit the return by April 15, 2029. However, if you amend the return on March 16, 2026, just 30 days before the audit deadline, and the return shows an increase in tax, the IRS now gets an extra 60 days, so until May 15, 2026. 

How does the IRS decide when to go back six or more years?

Generally, the IRS audits a taxpayer's most recently filed return, and the auditor may decide to look at the last three years of returns. If those returns indicate significant income understatement or fraud, then the agency goes back six years or even further in some cases. The IRS doesn't randomly start looking at six-year-old returns for these issues -- instead, it starts by auditing newly filed returns and then goes back if there are concerns.

How Long Does the IRS Take to Audit Most Tax Returns?

The IRS tries to audit returns as quickly as possible. Most returns are audited within two years of being filed. So, although the agency can take three years or even longer, in most cases, if you don't get an audit notice within two years of filing, you don't have to worry -- again, there are significant exceptions as outlined above.

What if you made a mistake on your return?

If you made a mistake on your return, you may need to amend it -- that just means you file a return that shows your originally reported info along with the correct details. However, if it's a minor mistake and the audit time frame has already passed, you may not need to amend. On the other end of the spectrum, if the "mistake" you made was actually a potential tax crime, you should not amend -- instead, you may need to go through the IRS's criminal voluntary disclosure program. Talk with a tax attorney to protect yourself.

How long should I keep tax records?

The IRS recommends keeping tax documents for at least three years in case you're selected for an audit. However, some details must be saved for at least six years. To be on the safe side, you may want to keep all tax records for six years. If you're selected for an audit and don't have receipts or other documents, it can be hard -- but not impossible -- to get through the audit.

Why Is the IRS Asking to Extend the Time to Audit?

Often, if you're selected for an audit, the auditor will ask you to sign a waiver extending the assessment statute. That's typically because the IRS wants more time to audit the return. A complicated tax audit can take anywhere from a few months to over a year. For example, say that the agency selects your return for an audit, but there are only three months til the time limit runs out. The IRS may ask you to sign a waiver to give them extra time. 

There are a few points to consider. On one hand, signing the waiver gives the IRS extra time to assess tax against you, and if the statute expired, they wouldn't have that time. But on the other hand, if you don't extend the timeline, the auditor may rush through the process, and if they assess tax against you, you'll have to deal with audit appeals.

Collection Timelines If the Audit Leads to a Tax Assessment

At the end of the audit, the auditor will let you know if they accepted your return as filed or made changes -- changes are often reported on Form 4549 (Income Tax Examination Changes), but other forms may be used for different types of returns. If the IRS assesses tax against you, they have 10 years to collect it -- the last day of this time frame is called the Collection Statute Expiration Date (CSED).

If the auditor assesses tax, you will incur audit penalties. At the very least, there will be a penalty for failure to report the income, but if there were significant errors, you may face an accuracy-related penalty or potentially even a civil fraud penalty. 

What to Do If You're Selected for an Audit

You'll receive an audit notice in the mail if you've been selected for an audit -- that may happen due to discrepancies between your return and other information provided to the IRS, random selection, or other audit triggers. If you receive a notice, you should reach out for help -- review this list of tax professionals who have experience resolving IRS audits or start a search below and click "audit or examination" using the filters on the search page under "problem experience."