Yang, a calendar year taxpayer, did not file a tax return for 2005 because she honestly believed that no additional tax was due. In 2011, Yang is audited by the IRS and the agent assesses a deficiency of $17,000 for tax year 2005. Yang need not pay this deficiency, since the statute of limitations expired on April 15, 2009.

Question

Quizplus · Accepted Answer

The statute of limitations for the IRS to assess a deficiency is generally three years from the date the return was filed. However, if no return is filed, the statute of limitations does not begin, allowing the IRS to assess the deficiency at any time.

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