Due to precautions related to COVID-19, we have expanded our options for remote consultations. Please contact our office to discuss whether a full phone consultation or video conference is appropriate for your situation.

Mistakes that could increase audit exposure

Minnesota residents may believe that the IRS can only audit their returns for three years after they are filed. While this is true in many cases, there are also scenarios in which the IRS has six years to audit a return. For instance, if an individual understates his or her income by more than 25 percent, the government has six years to audit that return.

The same is true for those who fail to account for more than $5,000 in foreign income even if an individual reveals the account. It is also important to note that there is no time limit for the IRS to investigate those who fail to file a tax return at all. The clock also fails to start if an individual doesn’t file Form 3520 or Form 8938 that account for gifts from foreign nationals or overseas assets.

Those who own part of a foreign corporation must file Form 5471. Failure to do so could result in a $10,000 penalty per missing form, and it could leave an individual’s entire tax return open to audit indefinitely. Individuals who are submitting a return must sign it for the return to be considered valid. Otherwise, the IRS may act as if it were never filed, which could leave an individual exposed to audit risk for years to come.

Individuals who have been notified of an IRS audit may wish to talk with an attorney. An attorney may be able to help appeal any decision made by the government or work to negotiate an offer in compromise. This may help a taxpayer resolve an outstanding matter while paying as little as possible to do so. An attorney may negotiate with the IRS with or without the taxpayer present at such talks.

Findlaw Network


Office Location

Edina Tax Law Office
Pridgeon & Zoss, PLLC
7301 Ohms Lane, Suite 420
Edina, MN 55439

Telephone: 952-835-8320
Fax: 952-835-0201
Edina Law Office Map

St. Anthony Tax Law Office
Pridgeon & Zoss, PLLC
2812 Anthony Lane South, Suite 200
St. Anthony, Minnesota 55418

Telephone: 612-455-8948
Fax: 612-788-9879
Map & Direction