What is the statute of limitations for the IRS to audit a tax return?

• A. Two years from the date the return was filed
• B. Three years from the date the return was filed
• C. Four years from the date the return was filed
• D. Five years from the date the return was filed

Answer: (B)

The statute of limitations for the IRS to audit a tax return is three years from the date the return was filed. This period is generally applicable for most taxpayers and provides the IRS with a timeframe to review and ensure the accuracy of the information reported on tax returns.

The three-year period begins on the due date of the return or the date it was actually filed, whichever is later. This statute is designed to create a balance between the IRS's need to enforce tax laws and the taxpayer's need for certainty and finality regarding their tax obligations.

It's important to understand that there are exceptions that can extend this time frame, such as if a taxpayer substantially underreports income, in which case the statute may be extended to six years. However, for most standard situations, including returns filed with accurate information and no fraud, the three-year limit applies. This is why the choice indicating three years is the correct answer.