How many years does the IRS have to issue an audit?

[asgautreaux269]

I've always heard that if you make it 3 years past the oops! You no longer have to worry about filing an amended return because the IRS can only go back 3 years. Is this true? Also, hypothetically, if two people who are not married are sent one tax form 1099 -C for a cancellation of debt, who has to file it? What happens if neither do?

[SabrinaD2]

It may be true that you don’t need to worry about filing an amended return after three years. However, there are exceptions to this rule. The IRS can review your return at any time if they suspect underreported income or fraud.

To answer your next question, if two people receive one Form 1099-C, the responsibility to report the income generally falls to the primary borrower. The IRS uses the information on Form 1099-C to verify that the reported income is included in the tax return of the individual(s) whose Social Security number(s) are listed on the form, such as the primary borrower and co-borrower. If neither the primary borrower nor the co-borrower reports the 1099-C as part of their tax return, they may face penalties and interest on the underreported income.

For additional information, please review this article.