They don't know your stock basis. The only way they determine if you made an honest mistake with respect to your cost basis is under audit.
Proceeds are reported to them annually, not cost basis.
Having said that, I am in no way suggesting that you do not report all income and deductions properly.
Are you on extension until Oct 15?
Proceeds are reported to them annually, not cost basis.
Having said that, I am in no way suggesting that you do not report all income and deductions properly.
Are you on extension until Oct 15?
Bear in mind that if they find a 2008 error, and you're quite well off, they'll crawl up your ass for the previous 5-6 years' worth of returns to see if they can squeeze a few more bob out of ya.
And if any of your previous 5-6 years of paperwork is missing then you better get a good accountant at $100 an hour to plead your case, or pay the IRS man his $ X,000
:drink:
And if any of your previous 5-6 years of paperwork is missing then you better get a good accountant at $100 an hour to plead your case, or pay the IRS man his $ X,000
:drink:
In the states eekster, an audit can only be conducted within three years from the due date of the tax return or three years from when you filed your return, whichever is later.
However, they can go back 6 years (maybe 7?) if you understate your income by 25% or more.
They can go back indefinitely if there is fraud. however, fraud is a very difficult concept to prove, it's a state-of-mind.
I've never seen anything over 3 years in my 26 years of practice. I don't think I've even had more than 20 returns audited in that time frame, all of them either very wealthy individuals, businesses or returns with a red flag. If you file a return with a red flag (ie:200k medical expense), you better be prepared to discuzz it. Most of the audits happened in the 80s. I had one client audited in the 90s, the aforementioned red flag. I've had 5 audits this decade, one lasting nearly three years which is in appeals at this moment.
I've never had one run of the mill average tax return audited in 26 years.
However, they can go back 6 years (maybe 7?) if you understate your income by 25% or more.
They can go back indefinitely if there is fraud. however, fraud is a very difficult concept to prove, it's a state-of-mind.
I've never seen anything over 3 years in my 26 years of practice. I don't think I've even had more than 20 returns audited in that time frame, all of them either very wealthy individuals, businesses or returns with a red flag. If you file a return with a red flag (ie:200k medical expense), you better be prepared to discuzz it. Most of the audits happened in the 80s. I had one client audited in the 90s, the aforementioned red flag. I've had 5 audits this decade, one lasting nearly three years which is in appeals at this moment.
I've never had one run of the mill average tax return audited in 26 years.
