[Anonymous]

I understand that the IRS statute of limitations extends to 6 years if there is a 25% understatement of gross income. However, a couple of Becker’s questions have conflicting explanations on the calculations.

If I stated on my return that I had gross income of $100,000, but inadvertently omitted $30,000, would this be subject to the six year statute of limitations? (Is the calculation 30,000/100,000 or is it 30,000/130,000?)

[nolifecpa]

i asked this question to my becker instructor a couple of years ago and he said it would be calculated as 30,000/130,000 but i've seen some mcq that calculated it as 30,000/100,000.

REG-65,71,74,73,70,74,79
BEC-60's,60's,69,71,76*,78
FAR-67,66,65,79
AUD-54,60's,65,83*,69,80
*expired

DONE

[mena je twa]

Keep it simple…. its 30% 100,000*30/100…. I dont know why they would say 30/130?

Licensed CPA, Texas - 2012

[Anonymous]

Here's what I found out.

According to IRC 6501(e), the six year statute of limitations applies if the omitted income is more than 25% of the amount “stated on the return” (30,000/100,000). This directly contradicts two Becker multiple choice answer explanations, but the IRC ranks MUCH higher than Becker as a tax authority, so I'll stick with the IRC 🙂

I e-mailed Becker about it but am yet to get an actual reply.

[Author]

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