Mr. Hepp, a self-employed consultant, failed to include a $38,200 income item on his 2015 Form 1040, which he filed on March 9, 2016. The gross income reported on the return was $102,380. What is the latest date that the IRS can assess any additional 2015 tax?

Question

Quizplus · Accepted Answer

The IRS generally has three years to assess additional tax, but if more than 25% of gross income is omitted, the period extends to six years. Since $38,200 is more than 25% of $102,380, the six-year rule applies, making the deadline April 15, 2022.

Mr Hepp, a Self-Employed Consultant, Failed to Include a $38,200