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Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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What is the statute of Limitations on Tax Liability in NC

Resolved Question:

I was sent an audit in 2006 for years 2003-2005. I missed the audit due to family sickness. I was able to get the tax year 2005 audited and reduced. But I was told that the 2003-2004 tax year had ran out of the statute of limitations and that I would have to pay the amount due for both of those years or make a offer in compromise. Do I have to pay for those years?
Submitted: 8 years ago.
Category: Tax
Expert:  Anne replied 8 years ago.

Hi Customer


Thank you for using justanswer. Most states, including NC and MI (where I live) have an "open window" or "statute of limitations" written into the state tax law for 3 years from the due date of the return for filing for any refunds or making any changes that would reduce the tax owed.


There is a 10 year statute of limitations when it comes to NC being able to collect any tax, UNLESS THE LIABILITY HAS BEEN ESTABLISHED WITHIN THE PROPER TIME FRAME. If the tax liability has been discovered during the proper time frame (meaning 10 years or less) then there is no statute of limitations for collection.


I know this was not the answer you were hoping to hear, but I hope it gives you some clarity of the way state taxation laws work.




I have included a link for the NC "offer in compromise form"


OIC 100



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Customer: replied 8 years ago.
Thanks for your response, since everything was disallowed. I know the tax amount due is incorrect. When submitting the Offer in Compromise is there a certain percentage of the tax due that we should offer?
Expert:  Anne replied 8 years ago.

Hi again Customer


I know this may sound like a non-answer, but the truth is there really are no rules when it comes to dollar amount for OIC's, other then you should offer as much as you can. (That's the non answer part)

Offer as much $ as you possibly can up front. Try to avoid the installment option. "A bird in the hand is worth 2 in the bush" has some merit when it comes to OIC's.


If you haven't already spoken to a taxpayer advocate, you should. This is a free service, and I've given you the link for the service in NC. These people should be able to guide you thru this process.


Contact a Local Taxpayer Advocate (LTA) in North Carolina


I hope this helps and the best of luck to you.



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