When does 3 year audit period end?

The statute says the later of 3 years from when you filed or the due date. In your example, you filed before the due date, so the IRS has until 4/15/13 unless you have an understatement of 25% of gross income. Then it is 6 years (4/15/16 in your example.)

Amending a return does not restart the clock. In your example, it remains at 4/15/13. However, the IRS does have a minimum of 60 days from receipt of the amended return to assess. If the IRS RECEIVES your amended return with less than 60 days until 4/15/13, the date would extend beyond 4/15/13 by the requisite number of days.

What if you get a valid automatic extension (Form 4868) and then timely file before the extension runs out in October? Is the SOL still set by the date filed or is it set by 4/15? (I imagine it's the former but assume nothing :)

It's three years from the date filed. So from my experience an extension till October doesn't extend the audit time for a return filed May 1st past may 1st three years later. And the "date filed" isn't quite right either, it'd be by the date accepted or processed by the service. Which would be, hopefully, just a few days after the date filed.

The extension of time to file does not change the date. It is still 3 years from original due date or when you filed.

Alan wrote:

But Section 6501(b)(1) says a return "filed before the last day prescribed by law or by regulations . . . shall be considered as filed on such last day." If you have an extension, isn't October 15 "the last day prescribed by law or by regulations" for that return?

Bob Sandler

Treasury Regulations, Subchapter F, Sec. 301.6501(b)-1

Sec. 301.6501(b)-1 Time return deemed filed for purposes of determining limitations

(a) Early return. Any return, other than a return of tax referred to in paragraph (b) of this section, filed before the last day prescribed by law or regulations for the filing thereof (determined without regard to any extension of time for filing) shall be considered as filed on such last day.

In your example, you filed before the due date, so the IRS has

By "understatement of 25% of gross income" you mean I erroneously say I owe $30,000 when I really owe $45,000. Nothing to do with estimated taxes. Is that correct?

Apples/Oranges.

You state the rule in terms of Gross Income, and then give an example not of gross income, but of Tax.

If during an audit of the most recent 3 year period, they find a problem, does that mean they can go back indefinitely?

I'm currently holding on to all of the paperwork of every tax return I have ever filed. Is that too much? Can I safely get rid of some of it?

I believe that the IRS computer systems only go back 10 years.