What is the statute of limitations?
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Table of Contents
What does the Statute of Limitations mean when it comes to taxes?
In tax terms, the statute of limitations is the period the IRS has to look back at your tax return and decide if something needs to be fixed. After that time runs out, they generally can’t audit you or charge you more tax—unless certain exceptions apply.
How long does the IRS usually have to audit your return?
Normally, the IRS has three years from the date you file your return to review it. If everything was reported correctly and submitted on time, the case is usually closed once that time passes.
Are there situations where the IRS gets more than three years?
Yes, and this is where it gets important—especially for expats:
- If you leave out a large amount of income (typically more than 25% of what you should have reported), the IRS has up to six years to reopen the return.
- If you earn money abroad and don’t report it properly, such as income from a foreign bank account or investment, the six-year window applies here too.
- If you never file a return at all, there’s no time limit. The IRS can come after you at any point, even decades later.
What if you filed but forgot to include a foreign account or asset?
If your return is missing required disclosures—like information on overseas bank accounts, trusts, or ownership in foreign businesses—the IRS can wait until three years after you submit that missing info to close your file.
So even if your tax return is several years old, the clock doesn’t start until you’ve sent in everything they’re expecting.
Can the IRS take action at any time in some cases?
Yes. There’s no expiration date for certain serious issues:
- If the IRS believes your return was intentionally misleading, they can investigate whenever they want.
- If you committed tax fraud, which means deliberately hiding income or faking deductions, there’s no deadline for how far back they can go.
What happens if you ask the IRS Taxpayer Advocate for help?
The Taxpayer Advocate Service (TAS) is a group within the IRS that helps taxpayers facing complicated or unfair situations.
If you open a case with them, the statute of limitations might be paused while your issue is being worked out. This means the IRS could get extra time to audit or assess your return.
Do expats face different timing rules than those living in the US?
Yes. Living abroad brings additional filing requirements, and missing any of them can give the IRS more time to act:
- If you forget to file FBARs (for foreign bank accounts) or Form 8938 (for foreign financial assets), your return stays open until you send them in.
- If you claim a foreign tax credit and the foreign country later changes or refunds that tax, the IRS can recheck your old returns to make sure the credit was accurate.
Why does this time limit exist in the first place?
The main idea is fairness.
Over time, records get lost and memories fade, making it harder to sort out old tax issues. Having a time limit encourages both the IRS and taxpayers to resolve things while everything’s still fresh.
Are there drawbacks to having a time limit on tax cases?
There can be. For example:
- Someone might not realize they had a tax issue until years later, but by then the statute might have run out.
- On the flip side, a person who underreported income might avoid consequences just because enough time passed before anyone noticed.
Get professional help today. Consult with our tax experts to get back on track.
Do other countries follow the same rules as the IRS?
Not exactly. Each country has its own rules about how long tax authorities can go back. If you’re living abroad, make sure you understand the deadlines not just in the US but also in your current country of residence.
How long do you have to take legal action in the US?
In the US, how long you have to sue someone—or for the government to charge you with a crime—depends on what kind of case it is. This deadline is known as the “statute of limitations.” Some cases can only stay open for a couple of years, while others, like murder, can be prosecuted at any time.
How much time do you have to file a civil lawsuit?
If you want to take someone to court for money or damages, the time limits vary based on what happened and where you are. Here’s what that might look like:
- Injury claims (car accidents, medical mistakes): Typically 1 to 6 years
- Contract disputes: 2 to 15 years, depending on whether it was written or verbal
- Property damage (car, home, vandalism): Around 3 to 6 years
- Fraud or scams: Time limit often starts when the fraud is discovered, not when it happened
- Defamation (false claims that hurt your reputation): Usually 1 to 3 years
Each state sets its own rules, so the time limit can vary widely depending on location.
What about criminal charges—how long can those stay open?
If the government wants to prosecute someone, there’s a different timeline based on the seriousness of the crime:
- Murder and certain violent crimes: No time limit—these can be prosecuted at any point
- Felonies like theft or assault: Often 3 to 10 years
- Misdemeanors (less serious crimes): Usually 1 to 2 years
State laws apply here too, so what counts as a felony or misdemeanor, and how long the government has to file charges, can differ.
Do federal crimes follow the same time limits?
Not exactly. Most federal crimes—like fraud, embezzlement, or identity theft—come with a five-year limit. But there are exceptions:
- Terrorism, child exploitation, or crimes that result in death: No expiration—charges can be filed at any time
- Financial crimes involving banks or securities: Sometimes up to 10 years
- Crimes connected to new DNA evidence: The timeline may restart if new evidence comes to light
Can anything pause or delay the statute of limitations?
Yes, certain things can stop the clock temporarily. This is often referred to as “tolling.” Here are a few situations where the time limit might be extended:
- Delayed discovery: If someone didn’t realize they were harmed until later, the time limit may start when they find out—not when the event occurred
- Defendant isn’t available: If the person being sued or charged is out of the country or hiding, the clock might stop until they return
- The person affected is a minor or mentally unable to act: The time limit might not start until they turn 18 or regain legal capacity
These exceptions are designed to keep things fair in situations where someone couldn’t reasonably take action right away.
Why does the statute of limitations matter in legal and tax cases?
If you try to bring a claim after the deadline has passed, the court will most likely reject it—even if your case is otherwise valid.
On the criminal side, the government can’t file charges once the time has expired (unless it’s one of the exceptions). That’s why it’s important not to wait too long if you think you’ve been wronged or need to defend yourself.
Which types of cases don’t have a time limit at all?
Some legal issues are considered serious enough that they can be prosecuted at any time:
- Murder or manslaughter
- Certain sexual offenses, especially those involving minors
- Terrorism-related crimes
- War crimes or crimes against humanity (these also have no expiration under international law)
Are there examples of longer time limits for certain offenses?
Yes, some categories have more generous time frames:
- Financial crimes (like large-scale fraud or money laundering): Up to 10 years
- DNA-related cases: Some states allow prosecution years later if new DNA evidence surfaces
- Felony sex crimes: Many states give prosecutors 10–20 years to file charges, especially when involving minors or repeat offenders
Which types of claims tend to expire more quickly?
On the other hand, more routine cases have shorter time limits:
- Minor crimes (like shoplifting or public intoxication): Often 1 to 3 years
- Civil disputes (injuries, small contract issues, or slander): Usually 2 to 6 years
- Debt lawsuits: Creditors generally have 3 to 10 years to sue over unpaid debts, depending on the state
These shorter deadlines are designed to encourage quicker resolution and to protect people from dealing with very old legal issues.
How do tax violations fit into all of this?
Tax cases are handled a little differently.
- If you file your tax return correctly: The IRS has three years to audit or assess additional tax
- If you leave out more than 25% of your income: They get six years
- If you don’t file at all or commit tax fraud: There’s no time limit—the IRS can come after you at any point
For people with foreign income or overseas accounts, the IRS may also delay closing your case until you provide all required disclosures
