Question

Jordan filed her 2018 income tax return on August 20, 2019. Jordan reported $100,000 of gross...

Jordan filed her 2018 income tax return on August 20, 2019. Jordan reported $100,000 of gross income on her return. Inadvertently, Jordan failed to report $5,000 of income. If the IRS audits Jordan's return and discovers the error, what is the last day the IRS can assess additional tax?

Group of answer choices

April 15, 2022

April 15, 2025

August 20, 2022

August 20, 2025

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Answer #1

Concept:

Internal Revenue Service ( IRS ) : Statue of limitations- Time period that IRS can come after the individual for taxes due

A. Error/Simple Negligence- 3 years after later of (I). return due date or ( ii ). return filing date.

B. Gross Negligence OR Gross Income understated by 25% - 6 years after the later of ( I ). Return due date or ( II ). Return filing date.

C. Fraud or failure to file - Unlimited duration.

Answer :

The given case is of error in filing of return. IRS has three years from later of ( I ). Return due date or ( II ). Return filing date to access additional taxes.

Return due date April 15 2019.

Return filing date August 20 2019.

The later of above dates would be August 20 2019.

Last date for IRS to assess additional tax will be 3 years from August 20 2019 that is August 20 2022.

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