TIOL-DDT 1215 · Wednesday, 14 October 2009 · story 2 of 4

Limitation under US Income tax laws

You think Indian Laws are draconian? Look at the US provisions.

Normally IRS has three years:

The Federal Statute of limitation runs for three years after the return is filed. If there is more than 25% understatement of gross income, the IRS gets another three years.

Sometimes, it is forever for the IRS:

If a return is not filed or a fraudulent return is filed, this is the tax equivalent of murder and the statute of limitations never runs out. The IRS has no time limit.

A leading US tax lawyer advises, “If you file electronically, keep all the electronic data, plus a hard copy of your return. (Incidentally, I do not advise clients to file electronically until the tax law mandates it.)”

The poor backward Americans!