If the IRS discovers an error in a tax year under audit, will they look at other tax years? How many years worth of returns are at risk during an audit?

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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Back to Audit Representation FAQs

Practice Areas

• Tax Law
  • Audit Representation
  • Audit Representation FAQ
    • What options are available to me where I am unable to pay a deficiency, penalties and interest at the conclusion of an audit?
    • What is the significance of receiving a 30 day and 90 day letter following an audit?
    • What is involved with appealing disagreements, both within the IRS and before the courts?
    • What rights do I have where I disagree with the auditor’s findings at the conclusion of an audit?
    • I have been audited several times in the recent past. Is there anyway to stop the IRS from repeatedly auditing me?
    • Can I have the examination transferred to another area?
    • Can I record the IRS interview with the IRS revenue agent and is it a good idea to do so?
    • If the IRS discovers an error in a tax year under audit, will they look at other tax years? How many years worth of returns are at risk during an audit?
    • What can I do to prepare for an audit?
    • Do I have the right to know why I was selected for examination?
    • What are the most common reasons the IRS decides to conduct an audit? What are they commonly looking for in an audit?
    • Is there anything I can do to decrease the odds of subsequent negative consequences stemming from an in-person interview with a taxing authority?
    • Do I have to submit to being interview by the taxing authority directly?
    • Are all audits the same or do they come in different flavors?
    • What should I do if I suspect that the IRS may be considering criminally investigating me?
    • What will happen if I do not respond to the taxing authorities audit notice?
    • What rights do I have during an audit?
    • What is the largest risk you expose yourself to if you choose to attend an audit without proper representation?
    • What is the most common audit technique applied by the taxing authorities?
    • What is the worst that can happen if I choose to represent myself in an audit?
    • Why should I hire an attorney rather than any other type of tax professional to represent me in an audit before the IRS, Franchise Tax Board or State Board of Equalization?
    • Why should I hire The Tax Law Office of David W. Klasing to represent me in an audit before the IRS, Franchise Tax Board or State Board of Equalization?
  • Tax Preparation & Compliance
  • Bookkeeping & Accounting
  • Tax Transactions
  • Tax Research
  • IRS Appeals Representation
  • IRS Appeals Representation FAQ
    • Why should I consider engaging The Tax Law Office of David W. Klasing to help negotiate my Appeal?
    • Why should I consider engaging the Tax Law Office of David W. Klasing to, at a minimum, prepare my Tax Court Petition or my Protest in order to be granted an Appeal?
    • Why would I not want my original Tax Preparer to represent me in my Appeal (or in my audit)?
    • What are the main advantages of filing an Appeal?
    • What exactly is the function of the IRS Appeals Office?
    • What protections are in place to make sure the Appeals Office is truly independent?
    • How is a Tax Appeal initiated?
    • What is the first thing I should do If I do not agree with the results of an audit?
    • What must be included in protest of IRS Audit findings to be granted an Appeal and position myself for a favorable outcome?
    • When do I know for sure that I'm ready to request Appeals Conference?
    • What can I expect from Appeals?
    • What commitments does the IRS Appeals Office make in dealing with taxpayers?
    • What commitments does the IRS Appeals Office expect from taxpayers?
    • Should I consider an appeal where the IRS has rejected or terminated my installment agreement?
    • What types of collection actions can be appealed?
    • What is the procedure to appeal a collection action instituted by the IRS?
    • How do you request a CDP or equivalent hearing with the Office of Appeals?
    • Does the filing of an appeal stop interest and penalties from accruing while the appeal is pending?
    • What happens if I do not respond to a Notice of Deficiency within the required 90 days?
    • Is Help available within the IRS itself if I am experiencing economic harm because of an IRS collection action?
    • What recourse do I have if I cannot reach an agreement with the IRS Office of Appeals?
    • How does the appeals process ordinarily conclude?
    • How long will it be before I hear from the Appeals office after I file my appeal request or protest?
    • What are the possible disadvantages of filing an Appeal rather than proceeding straight to Tax Court?
    • If I choose to litigate my tax controversy is it possible to recover my administrative and litigation costs?
    • You are the prevailing party if you meet all the following requirements:
    • Is there any way that my decision to bypass Appeals and go straight to Tax Court could backfire?
  • Offers In Compromise
  • Tax Litigation
  • Non-Filer Assistance
  • Non-Filer Assistance FAQ
    • How important am I to the Federal and State Governments as a non-filer?
    • How likely is it that I will face criminal prosecution and go to jail when I file my delinquent tax returns?
    • What should I do to re-enter the Tax System?
    • What specifically can the Tax Law Office of David W. Klasing do to help me re-enter the system?
    • Should I use an attorney, EA or a CPA to represent me when I re-enter the tax system?
    • What if I have a trusted relationship with a tax preparer and wish to have the additional protection of having a tax attorney represent me when I re-enter the tax system?
    • What are the common reasons people drop out of the tax system?
    • How does the IRS identify non-filers?
    • What happens after a non-filer has been identified by the IRS?
    • Once enforcement action has begun by the IRS, can I expect to hear from the state of California on the same issue (and visa versa)?
    • What is the government likely to do to force me to file the returns I have not filed?
    • Can a deficiency on a substitute return be modified by a subsequent delinquent return?
    • Can a deficiency on a substitute return be discharged in a subsequent bankruptcy?
    • What happens where the IRS have not previously filed substitute returns?
    • What penalties is the IRS able to impose on the delinquent tax filings?
    • Am I likely to be audited by the taxing authorities once I file the delinquent prior year returns?
    • Do I have to file every delinquent tax return for every missing tax year?
    • If I am due a refund or a credit on a delinquent tax year will I receive them?
    • Will any subsequent collection action taken by the taxing authorities after filing my delinquent returns affect my personal or business credit rating?
  • FBAR Compliance and Disclosure
  • FBAR Compliance and Disclosure FAQ
    • What exactly is an FBAR? (Report of Foreign Bank and Financial Accounts)
    • What are the common characteristics of the FBAR voluntary disclosures that have been made to date?
    • Why should you consider making a Voluntary Disclosure even though the FBAR Voluntary Disclosure program ended October 15, 2009?
    • How likely am I to be criminally prosecuted where I missed the October 15, 2009 deadline and subsequently decide to make a Voluntary Disclosure?
    • What are the required elements to make a valid Voluntary Disclosure given that the FBAR Voluntary Disclosure program ended October 15, 2009?
    • What if the taxpayer has already filed amended returns reporting the additional unreported income, without making a Voluntary Disclosure (i.e., quiet disclosure)?
    • What are some of the criminal charges I might face if I do not come in under voluntary disclosure and the IRS finds me?
    • The following is a summary of potential reporting requirements and civil penalties that could apply to a taxpayer, depending on his or her particular facts and circumstances.
    • Given that the FBAR Voluntary Disclosure program containing limited civil penalties ended October 15, 2009 and the potential civil penalties delineated above, what is the maximum I am likely to pay if I make a voluntary disclosure related to my foreign account in order to limit my exposure to criminal prosecution?
    • Given that the expired FBAR Voluntary Disclosure program generally limited the requirement to amend previously filed returns to six years, how many years will I be required to amend if I make a Voluntary Disclosure?
    • When determining the highest amount in each undisclosed foreign account for each year or the highest asset balance of all undisclosed foreign entities for each year, what exchange rate should be used?
    • If I do not have the ability to full pay can I still participate in the IRS's Voluntary Disclosure Practice?
• Business Law
• Estate Planning
  • Wills and Trusts