A revenue agent shows up at your client's door asking about a 2019 return. Your client received a CP2000 last month, a math error notice the month before, and a Letter 4883C about possible identity theft. The case may end in Tax Court. Five separate clocks are ticking, and the wrong default on any one of them forfeits the case.
The IRS generally has 3 years from the later of the return's due date or its filing date to assess additional tax. Three carve-outs extend or remove that window.
KEY: "Gross income" for the 25% test means gross receipts for a trade or business, not net. A sole proprietor reporting $100,000 of sales who omitted $30,000 of additional sales triggers the 6-year window. Basis overstatement on property sales is also an "omission" since the Home Concrete override by §6501(e)(1)(B).
Extensions by consent. Form 872 (open-ended limited to specific issues with §6501(c)(4) restrictions, in practice rare) and Form 872 / 872-A extend the period by written agreement signed before the SOL expires.
Common mistakes
- Treating a math error notice as a 90-day letter. Math error notices give 60 days to request abatement under §6213(b)(2). Tax Court rights only attach after a properly issued notice of deficiency. Trap answer: "petition Tax Court within 90 days of the math error notice."
- Assuming refund claims survive late filing. §6511 lookback caps refunds at withholding paid within the 3-year (or 2-year) window. A return filed April 16 for a year ending three years ago forfeits the entire withholding refund. Trap answer: "refund is recoverable if the return is eventually filed."
- Equating tax avoidance with tax evasion. Avoidance is lawful tax minimization. Evasion requires willfulness plus an affirmative act. The civil fraud penalty (§6663) requires clear and convincing evidence. Trap answer: "aggressive but legal planning is evasion."
Bottom line
- Assessment SOL (§6501): 3 years default, 6 years (25%+ gross-income omission or $5,000+ foreign-asset omission), unlimited (fraud or no return filed)
- Collection SOL (§6502): 10 years from assessment; tolled by OIC, CDP, bankruptcy, time abroad
- Refund claim SOL (§6511): later of 3 years from filing or 2 years from payment, subject to a lookback cap on the recoverable amount
- Math error notice (§6213(b)): 60 days to request abatement; CP2000 is not a notice of deficiency; CP3219A triggers 90-day Tax Court rights
Exam shortcut
Three SOL questions, three numbers: 3 (assessment), 10 (collection), and "later of 3 or 2" (refund). Any extension story (6-year, unlimited) attaches to assessment only. Notice taxonomy by the response window: 60 days = math error abatement; 30 days = CP2000 or 30-day letter (pre-90-day); 90 days = statutory notice of deficiency (Tax Court). The window tells you which notice you're looking at.
The full lesson (about 4,289 words, 29 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- 6
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