Yang, a calendar year taxpayer, did not file a tax return for 2010 because she honestly believed that no additional tax was due. In 2018, Yang is audited by the IRS and the agent assesses a deficiency of $17,000 for 2010. Yang need not pay this deficiency, since the three-year statute of limitations expired on April 15, 2014, meaning that the IRS no longer can adjust Yang's tax for the 2010 tax year.

Question

Quizplus · Accepted Answer

The three-year statute of limitations for the IRS to assess additional tax does not begin until the taxpayer actually files a return. Since Yang did not file a return for 2010, the statute of limitations did not start, and the IRS can still assess the deficiency.

Yang, a Calendar Year Taxpayer, Did Not File a Tax