Question

Martin timely filed a 2008 tax return showing gross income of $250,000, but intentionally did not report approximately $20,000 of other income. When does the statute of limitations expire for Martin's 2008 tax return?

Answer 1

The statute of limitations for Martin's 2008 tax return, where he intentionally omitted $20,000 of income, expires six years from the filing date due to underreporting income by more than 25%.

Step-by-step explanation:

The statute of limitations for the Internal Revenue Service (IRS) to assess additional taxes on a tax return is typically three years from the date the return is filed.

However, in cases where a taxpayer omits more than 25% of their gross income, as Martin did by not reporting an additional $20,000, the statute of limitations is extended to six years. Since Martin filed his 2008 return timely, for his case, the statute of limitations would expire six years from the filing date of his 2008 tax return.