Final answer:
The statute of limitations on Allen's 2016 tax return would end on May 15th, 2023, since he underreported his income by 30%, extending the normal three-year limitation to six years. Therefore, the correct answer is 'None of the above'.
Step-by-step explanation:
The statute of limitations for the Internal Revenue Service (IRS) to assess additional tax on a filed return in which a taxpayer has understated their income by more than 25% is six years from the filing date, assuming no fraud is involved. Allen filed his 2016 tax return on May 15th, 2017. Normally, the statute of limitations would be three years, but because he underreported his gross income by 30%, which exceeds the 25% threshold, the statute of limitations is extended to six years. Therefore, the correct date on which the statute of limitations for IRS assessment on Allen's 2016 tax return should end would be May 15th, 2023. Option 5, None of the above, is the correct answer. This rule is based on the understanding that paying taxes is a requirement for U.S. citizens, who usually file taxes using forms like the 1040EZ, making this one of their most direct forms of contact with the government.