If a taxpayer understates her cash sales by 30% of the adjusted gross income on the return,the statute of limitations on assessments is increased to six years.

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According to the IRS, if a taxpayer understates her cash sales by 30% of the adjusted gross income on the return, the statute of limitations on assessments is increased to six years. This means that the IRS has an additional two years to assess any additional taxes owed, fraud penalties, and interest on the unreported cash sales.

If a Taxpayer Understates Her Cash Sales by 30% of the Adjusted