There is a statute of limitations that limits the IRS to three years to audit a return. But there are exceptions. If income is underreported by 25%, the limit is extended to six years. If you file a fraudulent return, there is no limit. If you fail to file Form 8938 “Specified Foreign Financial Assets” when required, then the three-year limit doesn’t start until the form is filed. 

Yes, we consider it an audit. A CP2000 letter is a letter sent by the IRS with the letter numbers “CP2000” at the top. A CP2000 letter is sent when the IRS computers detect that you didn’t account for all the W-2, 1099, and K-1 forms that the IRS knows about from companies that paid you money. Failure to account for all this income on your tax return is the number one cause for an audit.

A taxpayer doesn’t have to file a tax return if their taxable income would be $0. However, if you don’t file a return, the statute of limitations on auditing never starts. This is important protection. The IRS can prepare a return for you if you don’t file and assess tax-called a “Substitute for Return (SFR)”. This is usually not favorable. 

Watch this video to learn how a CryptoTaxAudit membership can provide you with an early warning of an IRS audit. Click to view →

The IRS doesn’t like to use the word “audit”. They call auditors “Revenue Agents” and they call human-driven and computer-driven audits “examinations.” At CryptoTaxAudit, we don’t engage in doublespeak. We consider all examinations, however driven, to be audits.

Yes. CryptoTaxAudit can assist in resolving all types of IRS examinations and audits. We can also assist with establishing a payment plan if you are unable to pay your taxes in full or have IRS debt collection issues.