Collection statute-of-limitations

Does preparation of a substitute-for-return by the IRS start the clock on the 10 year collection statute-of-limitations for an individual taxpayer?

Reply to
jhhtexas
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The date of assessment of the SFR starts the ten year clock.

Reply to
paultry

The problem is that an SFR is NOT considered an actual return because either you didn't sign it OR it wasn't the result of court order. In either case the statute of limitations to ASSESS tax stays open UNTIL you either file a signed return OR until a court (usually the tax court) issues a judgment.

So since the IRS CAN come back anytime in the future and ASSESS or REASSESS the tax, the statute of limitations to collect that portion starts when that tax is assessed. If you never filed a return for 1975 and the IRS prepared an SFR, assessed a tax and you paid that tax OR the statute to collect that tax has passed you're safe from that tax only. BUT the IRS could decide NOW to audit that year, assess more tax, which would create a new statutory period for collection. Alternatively you could FILE a signed return for that period (assume) that results in LESS tax liability and have no ability to get a refund - since the statutory period to claim a refund is 3 years.

TECHNICALLY - as I said first, from a practical standpoint I have never seen or heard of the IRS bothering MOST people about an SFR vs. a signed return once six years have passed. NOTE I said MOST people. I have heard anecdotal stories about the IRS going after those with LARGE estates or on who they've issued a jeopardy assessment - the premise being these folks have/had money so let's make sure we get all we should.

Gene E. Utterback, EA, RFC, ABA

Reply to
Gene E. Utterback, EA, RFC, AB

Gene's answer is better.

The date of assessment of the SFR does start the collection clock. However, as assessment is still open, a later supplemental assessment can restart the collection clock. Mere preparation of the SFR report does not start any SOL clock.

For Gene: During my 6 years at the IRS, only once did I issue an SFR outside of the 6 year window. It was for CoD income and the taxpayer in question had been a non-filer for 12 years. I did it because the tax for that year alone was larger than the sum of the taxes on the most recent 6 years for that person. This one one of my few "IRS summons" cases (for the loan file).

Reply to
D. Stussy

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