Does filling out your taxes stress you out or make you angry? The IRS has many problems, and we can't solve them all at once, but we can fight back in one small, easy way.
Let's decrease the Statute of Limitations on taxes from 3 years to 1 year!
This is a very easy change to make, and there is literally no good argument against it.
What would this mean?
Right now, legally the IRS can audit you for any reason for up to 3 years after you file your taxes. This means that you have to keep all of your paperwork and have to worry about the possibility of the audit for 3 years. If we changed the Statute of Limitations to be 1 year, the IRS would not be able to legally audit you after a year after you file your taxes unless they could prove you misstated your income by at least 25% or had committed fraud. Can you imagine how good it would feel if the IRS tried to audit you 1 year and 1 day after you filed your taxes to be able to tell them that they legally have to leave you alone? We can easily make that a reality!!!
How hard would this change be to make?
It is REALLY easy. All law makers have to do is change the number 3 to the number 1 in an already existing law. The law for this Statute of Limitations is found in 26 U.S. Code § 6501 - Limitations on assessment and collection in paragraph a. If you want a link to the law, check out: Link to Law.
Who would this change hurt?
No one! All it would mean is that the IRS would have to actually be efficient. Right now, the IRS seems to prioritize auditing returns that are just short of the 3 year cut-off, (I personally have never seen the IRS audit anyone sooner than that). I'm guessing this is because if they actually find anything they can charge a lot more for interest penalties. This might make sense if filing taxes was an easy, simple, straight-forward process, but the reality is that even a CPA can mess up a tax return, and there are so many gray areas that even if you get it right you could get into trouble. Also, with the IRS you are considered guilty until proven innocent, and the IRS can audit you if they even SUSPECT you might have messed something up. Also, the taxpayer has roughly 3 months to file his or her taxes. Why on earth should an average taxpayer be given only 3 months to prepare the taxes, but a large entity like the IRS that is full of professionals is given 3 years to audit that tax return?
I'm guessing the reason the IRS is given 3 years to audit the tax return is because the taxpayer is given 3 years to amend it in case the tax payer wants to for example take a net loss back 3 years. But this wouldn't cause any problems. If a taxpayer refiles his or her taxes, then the new filing date on the updated taxes would give the IRS another year to audit the new filing. There is absolutely no practical reason why the IRS needs the same amount of time to audit filings as taxpayers have to amend filings. I can see why a surface level review would make someone think that needed to be the case, but it simply doesn't.
Also, because the IRS receives a new batch of tax returns every year, anything beyond a year doesn't give the IRS more time to do their job. If an IRS is auditing 300 tax returns over 3 years or 100 returns over 1 year he or she still has to audit 100 returns per year.
Honestly, I would be in favor of dropping the audit time even lower, but 1 year just makes sense. It's a clean number that everyone can remember. Changing this Statute of Limitations doesn't have to, and should not, change any other IRS rules or regulations.
The IRS is essentially paid to be inefficient. The IRS has all of the power. This is just the first of many reforms that I believe should be made to put the taxpayer back on slightly more even footing with the IRS. If we have to be subjected to an audit, we should at least be audited close enough to our filing that we are still in contact with our tax preparer, that we still remember most of the things that happened that year, and close enough that we are more likely to have a similar income and savings from that income. Almost everyone I have seen get audited was audited after losing their jobs. It's nearly impossible to pay off taxes from three years ago when you have been without a job for 2 of those 3 years.
What do I need from you?
- Contact your Senator and Representative if you live in the United States. Tell them that you support this bill. I am contacting my Senator and Representative, but this needs to come from multiple people. Chances are, your Senator and Representative will not have heard of this bill. Just tell them to support dropping the IRS Statute of Limitations from 3 years to 1 year in 26 U.S. Code § 6501 - Limitations on assessment and collection in paragraph a.
Does that sound intimidating? It's actually really easy! You can contact your Senator or Representative by email, by phone, or even by regular mail. Your request may get assigned to an assistant, but it will be heard. Make sure you let them know that you are their constituent! If you don't know where to start, start here: USA Elected Officials. If you want, even send a message to the President.
- SPREAD THE WORD!!! Share this article. Talk to your friends and family. Write a letter to the editor. Post on Facebook or Instagram or Twitter or anything like that. Call your local news station and ask them if they would like to do a story on IRS Statute of Limitations as a story to have on hand for a slow news day. All stations need to have stories on hand for slow news days, so some might be open to it. Be creative. Share any way you can.
This is a very simple, very straightforward, easy change that our lawmakers can make. It would help many, many people every year, including you if you are a US taxpayer. It doesn't take a ton of people to make a difference. I need you! Think how great it will feel to know that you have actually been involved in our government. When the bill passes, you can tell your family and friends and neighbors - I was part of that. I was there in the beginning days when only a few people were working on this intitiative. The IRS has to leave you alone because I made a difference.
Not everyone can do both things. Maybe you are not a US citizen. Maybe the idea talking to your Representative or Senator is just too overwhelming. But if you can do EITHER thing, every little bit helps. Share this idea over and over and over again. Maybe you can't talk to your Senator, but maybe on of your followers on Instagram will be willing to do it. Please help!!!