Robert accidentally omitted from his 2019 tax return $80,000 of the gross receipts that he collected as the owner of a restaurant. His 2019 return indicated collective gross receipts of $200,000. The IRS nolonger can pursue Robert with the threat of collection of the related tax, interest, and penalties, as of April 15 of what year?
A)2021
B)2024
C)2026
D)2027
E)There is noexpiration date for the statute of limitations in this context.

Question

Quizplus · Accepted Answer

The IRS has a six-year statute of limitations for substantial underreporting of income, which is defined as omitting more than 25% of gross income. Since Robert omitted $80,000 from $280,000 total ($200,000 reported + $80,000 omitted), this is more than 25%. Therefore, the IRS can pursue him until April 15, 2026.

Robert Accidentally Omitted from His 2019 Tax Return $80,000 of the Gross