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One good tax thing about today
04-15-2010, 02:13 PM
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#1
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,726
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One good tax thing about today
It’s hard to find something positive to say about taxes and 4/15 so I thought I’d remind everyone that if you filed by the due date, today is the last day the IRS can challenge your 2006 tax return – at least for most reasons which affect this group.
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04-15-2010, 03:33 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2006
Posts: 7,733
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Thanks I'm still exchanging mail with the IRS about my 2007, so I guess 2006 is safe.
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04-15-2010, 09:11 PM
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#3
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Dryer sheet aficionado
Join Date: Apr 2010
Location: Canada
Posts: 36
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to recall an old episode of M*A*S*H*, tax time really is about getting your story straight
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Gettin old, getting grey, gettin ripped off, underpaid, gettin had, gettin took . . . let me tell you people, it's harder than it looks (Long Way to the Top - AC/DC)
Divin Dave
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04-15-2010, 09:15 PM
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#4
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,501
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Quote:
Originally Posted by MichaelB
It’s hard to find something positive to say about taxes and 4/15 so I thought I’d remind everyone that if you filed by the due date, today is the last day the IRS can challenge your 2006 tax return – at least for most reasons which affect this group.
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Really? I didn't know that! I thought they could challenge them forever.
I guess I can stop fretting about the fact that my ex took all my/our tax records with him when we divorced in 1998...
Actually the one I am most concerned about (because of its complexity, not because of any intentional wrongdoing) is my 2008 tax return. But it sounds like I only have two more years to worry about that one. I like that!
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Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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04-15-2010, 11:21 PM
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#5
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,774
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I just threw away some check stubs for work I did as an independent contractor. In 1993. Most of them for $50. Now I won't worry about being audited.
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04-16-2010, 05:57 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,895
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I think it was the last day you could file an amended return for 2006 but the IRS can go back to the day you earned your first nickel if they wanted to.
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Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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04-16-2010, 06:04 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2006
Location: Washington, DC
Posts: 11,331
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I always thought the IRS could go back 7 years. I just did a quick look and saw that it is normally 3 years, but 6 if they have reason to believe you under-reported by 25% or more.
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Idleness is fatal only to the mediocre -- Albert Camus
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04-16-2010, 06:37 AM
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#8
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Administrator
Join Date: Jan 2008
Location: Chicagoland
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Quote:
Originally Posted by frayne
I think it was the last day you could file an amended return for 2006 but the IRS can go back to the day you earned your first nickel if they wanted to.
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Three years for most claims, six years if income underreported by more than 25%, no limit only when accused of fraud.
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04-16-2010, 08:39 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
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Asked my CPA the same question (I want to pitch "old" tax files). He said the IRS is 3 years behind with audits. So an audit won't be initiated on returns more than 3 years old.
BUT if a pattern of fraud is detected in a audit, they can go back as far as they want. So you need to keep the files to defend yourself - forever.
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FIRE'd since 2005
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04-16-2010, 08:44 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
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Quote:
BUT if a pattern of fraud is detected in a audit, they can go back as far as they want. So you need to keep the files to defend yourself - forever.
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But think about this: what you're really saying is that they can go back as far as they want if they THINK they detect fraud. So, even if there's no fraud, they could still suspect it, in which case you need to keep all your records so that you can defend yourself. Right?
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Al
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04-16-2010, 09:48 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by TromboneAl
But think about this: what you're really saying is that they can go back as far as they want if they THINK they detect fraud. So, even if there's no fraud, they could still suspect it, in which case you need to keep all your records so that you can defend yourself. Right?
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Perhaps so, but as I understand it, in order to enforce it the IRS would have to prove there was fraud -- and that's a criminal offense so they would need to prove criminal intent beyond a reasonable doubt.
It wouldn't be like coming after you for a 2-year-old mistake on a return where they say "you owe it because we said so." They have to have a lot more proof if they allege fraud. The IRS is very powerful, but even they have to prove *criminal* allegations beyond a reasonable doubt.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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04-16-2010, 10:20 AM
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#12
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Administrator
Join Date: Jan 2008
Location: Chicagoland
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Quote:
Originally Posted by TromboneAl
But think about this: what you're really saying is that they can go back as far as they want if they THINK they detect fraud. So, even if there's no fraud, they could still suspect it, in which case you need to keep all your records so that you can defend yourself. Right?
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Criminal tax fraud is the intent to deceive. It's not evasion. If you can reasonably say "oops, I forgot" or "it's a math error" then it's not fraud and they can't audit you for that after 3 years unless the amount in question exceeds 25% of your income. Now, if you take unreported income, buy diamonds, smuggle them to Switzerland in a false toothpaste tube, then open an account and deposit - well, that's evidence of intent.
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04-16-2010, 11:04 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
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My understanding - when we discussed it - was that the IRS investigation (looking back more than 3 years) was limited to fraud previously detected (no full blown audits to detect new problems).
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FIRE'd since 2005
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04-17-2010, 10:50 AM
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#14
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Recycles dryer sheets
Join Date: Feb 2006
Location: Indianapolis
Posts: 417
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I saw on another forum that April 15th is also the day the Titanic sunk. Coincidence??--I don't think so....
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