12.5 Statute of Limitations
Key Takeaways
3-year general rule (from later of due date or filing).
6-year rule: omission >25% of gross income.
Unlimited: fraud, willful evasion, or failure to file.
10-year collection statute (after assessment).
Form 872/872-A: extend assessment statute.
Refund claim: 3 years from filing OR 2 years from payment.
Why This Matters for the Exam
SOL determines how long to keep records. Know the 3/6/unlimited periods and refund claim rules.
Assessment Statute of Limitations
| Situation | Period |
|---|---|
| Normal return | 3 years |
| Omission >25% gross income | 6 years |
| Fraud / Willful evasion | Unlimited |
| Failure to file | Unlimited |
When the Clock Starts
| Rule | Description |
|---|---|
| Start date | Later of due date or filing date |
| Example | File Mar 1, 2026 → clock starts Apr 15, 2026 |
The 6-Year Trigger
| Test | Description |
|---|---|
| Omission | >25% of reported gross income |
| Example | Report $120,000, omit $40,000 |
| Calculation | $40,000 > $30,000 (25% of $120k) = 6 years |
Collection Statute
| Period | Description |
|---|---|
| 10 years | From date of assessment |
| Tools | Liens, levies, seizures |
Extending the Statute
| Form | Effect |
|---|---|
| Form 872 | Fixed-date extension |
| Form 872-A | Open-ended (indefinite) |
| Form 872-T | Terminates 872-A |
Refund Claim Statute
| Rule | Description |
|---|---|
| 3 years | From date return filed, OR |
| 2 years | From date tax paid |
| Use | Whichever is later |
Real-World Scenario
Scenario: Taxpayer files 2024 return Apr 1, 2025. Omits $40,000 on $120,000 reported.
- Omission test: $40,000 > 25% of $120,000 ($30,000).
- Statute: 6 years.
- Clock starts: Apr 15, 2025 (later of due date/filing).
- Expires: Apr 15, 2031.
On the Exam
Question types to practice on SOL:
- Period Questions: "What is SOL for 30% omission?"
- Refund Questions: "Is this refund claim timely?"
- Extension Questions: "What form extends 872-A?"
The key is to remember: 3 years normal. 6 years if >25% omission. Unlimited if fraud/no file. Collection = 10 years. Refund = 3 years filing OR 2 years payment.
Filed 2024 return Apr 1, 2025. Omitted $40,000 on $120,000 reported. SOL expires?
Apr 1, 2028
Apr 15, 2028
Apr 15, 2031
Apr 1, 2031
2022 return filed/paid Apr 15, 2023. Today is May 1, 2026. Refund claim timely?
Yes, within 3 years
No, more than 3 years since filing
Yes, 5-year statute
No, paid within 12 months
Form 872-A (indefinite extension) terminated by which form?
Ends after 1 year
Form 872-T
Certified letter
Cannot be ended
Sections you finish are checked off in the contents.