Statute of Limitations (Tax)

The Statute of Limitations for taxes is a legal time limit within which the government can audit your tax returns and collect owed taxes. Typically, this period is three years from the date you filed your return. However, if you underreport your income by more than 25%, it can extend to six years. After the statute expires, the government can no longer take action to collect the taxes for that period. This provision helps provide certainty and fairness for taxpayers, ensuring they aren't indefinitely at risk of audits or back tax claims.