A six-year status of limitations applies if the taxpayer
A)understates adjusted gross income by 25%
B)understates taxable income by 25%
C)understates gross income by 25%
D)overstates deduction by 25%

Question

Quizplus · Accepted Answer

According to the IRS, the statute of limitations for assessing additional tax liability is six years for taxpayers who understate their gross income by 25% or more. This means that the IRS has up to six years to audit and assess additional taxes, penalties, and interest on the taxpayer.

A Six-Year Status of Limitations Applies If the Taxpayer