Actually, the 3 year statue starts from the original due date
of the return. Taxes for the 2005 tax year had a due date of 4/15/06. Three years from that date would be 4/15/09, so the IRS has until 4/15/09 to assess additional taxes on a return from the 2005 tax year.
However, many of the states do not follow the same 3 year limitation as the IRS. In the case of NJ, they have a 4 year statute, and again, the starting date is from the original due date of the return. Son in the case of taxes for the 2005 tax year which were due on 4/15/06, they have until 4/15/10 to audit that return and assess additional tax they feel is due. Here is the excerpt from their statutes:
New Jersey State Tax Law
generally places a
four-year statute of limitations on tax
audits, beyond which the Division may not
audit without your written consent. The
statute of limitations does not apply, however,
for any period during which a taxpayer
failed to file a return, failed to report
Federal changes, or filed a false or fraudulent
return to evade tax. Because variations
do exist, the specific provisions of each tax
law should be consulted.
You do, of course, have the right to appeal any decision they made to assess additional tax if you feel the assessment
was made in error.
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