How Long Does an IRS Audit Take? Timelines, Statutes, and Extensions

What Affects the Length of an Audit

According to the IRS, the length of an audit varies depending on:

• the type of audit (by mail, at an IRS office, or in the field);
• the complexity of the issues;
• the availability of the information requested;
• the availability of both parties for scheduling meetings; and
• whether the taxpayer agrees or disagrees with the findings.

A correspondence audit limited to one or two items can move faster than a field audit of a business with several issues. Complete, on-time responses help avoid follow-up requests. If the taxpayer disagrees and appeals, the process takes longer, but the case also receives an independent review.

How Far Back the IRS Looks

The IRS says that, generally, it can include returns filed within the last three years in an audit, and that most audits involve returns filed within the last two years because it tries to audit returns as soon as possible after they are filed. If it identifies a substantial error, it may add additional years, but it usually does not go back more than the last six years.

The Three-Year Assessment Statute

Under Internal Revenue Code section 6501(a), the IRS generally must assess additional tax within three years after the return was filed. A return filed before its due date is treated as filed on the due date. For example, a 2023 individual return filed in February 2024 is treated as filed on April 15, 2024, so the three-year period generally runs until April 15, 2027.

The deadline applies to the assessment, not to the audit itself. If the IRS mails a notice of deficiency before the period expires, the period is suspended while the IRS is barred from assessing (generally the 90-day period to petition the Tax Court, or until a Tax Court decision becomes final if a petition is filed) and for 60 days afterward.

Exceptions That Lengthen the Period

Substantial omission of income: six years

The period is six years if the return omits gross income in excess of 25% of the gross income stated on the return. For a trade or business, gross income for this test means gross receipts before subtracting the cost of goods sold. A six-year period also applies if omitted income of more than $5,000 is attributable to certain foreign financial assets.

For example, if a return reports $100,000 of gross income and the correct amount is $130,000, the $30,000 omission is 30% of the amount reported, so the six-year period applies.

Fraud or no return: no time limit

In the case of a false or fraudulent return filed with intent to evade tax, a willful attempt to evade tax, or a failure to file a return, the tax may be assessed at any time.

Unreported foreign information

If certain required information about foreign assets, entities or transfers is not reported, the period for assessing tax related to that information generally does not expire until three years after the information is furnished to the IRS.

Agreeing to Extend the Statute

When an examination is not finished as the deadline approaches, the IRS may ask the taxpayer to sign a consent to extend the time to assess tax. Form 872, Consent to Extend the Time to Assess Tax, extends the period to a fixed date. Form 872-A, Special Consent to Extend the Time to Assess Tax, is open-ended. The IRS must notify the taxpayer of the right to refuse to extend the period or to limit the extension to particular issues or a particular period of time.

Signing is voluntary. According to IRS Publication 1035, if a taxpayer chooses not to sign, the IRS will take steps to assess any tax it determines to be due, beginning with a formal notice of deficiency. That notice gives the taxpayer 90 days (150 days if addressed to a person outside the United States) to agree or to petition the Tax Court. Because a refusal can lead to a notice based on the information available at that time, the decision whether to sign, and on what terms, deserves careful thought.

Keeping Records for the Right Period

The IRS recommends keeping records for at least three years in most cases, six years if more than 25% of gross income was not reported, seven years if a claim is filed for a loss from worthless securities or a bad debt deduction, and indefinitely if no return or a fraudulent return was filed. Records relating to property should generally be kept until the period of limitations expires for the year in which the property is sold or otherwise disposed of.

The Bottom Line

The time an audit takes depends on its type and complexity and on how the taxpayer responds. The statute of limitations sets the outer boundary: generally three years, six years for a substantial omission of income, and no limit for fraud or unfiled returns. Requests to extend the statute are common and voluntary, and each one should be evaluated on its own facts.