The Assessment Statute Expiration Date (ASED) is the end of the time period in which the IRS can assess tax with respect to a particular tax year. The general rule is that an assessment of tax must be made within three years from the received date of an original tax return or three years from the due date of the original return, whichever is later.
Time to Assess Tax Can Be Extended
If you fail to file your tax return voluntarily, then the IRS can assess tax under the Substitute for Return (SFR) program. If your return was filed under the SFR program it does not set the three-year time limitation for the IRS to assess any additional tax. This means IRS can assess tax and additional tax at any time. If you decide to file your tax return, then a three-year time limitation is set, and the IRS can assess tax during this period. You may refer to Topic No. 153.
The time the IRS can assess tax can be extended if you agree with the IRS by signing a statutory waiver, or extension agreement. If the IRS proposes a waiver to extend the ASED, you can negotiate the proposed time limitation to assess, or refuse to sign the waiver.
If you omitted more than 25% of your gross income from a tax return, the time the IRS can assess additional tax increases from three to six years from the date your tax return was filed.
If you file a false or fraudulent return with the intent to evade tax, the IRS has an unlimited amount of time to assess tax.
The IRS cannot assess tax after the time limitation period for assessment has expired.
Additional information on the expiration for the time to assess tax and the length of extensions can be found in Publication 1035.