Q: In 2002 I received a wrongful termination judgement from a county agency. I did not add the settlement to my tax return
Is there a statute of limitations
A:
When it comes to tax issues, the IRS typically has a statute of limitations of three years from the date you filed your return to audit you or assess additional taxes. However, if you omitted more than 25% of your gross income, this period extends to six years. For fraudulent returns or if no return was filed, there is no statute of limitations.
Given that your wrongful termination settlement was from 2002, it is likely beyond the typical three or six-year limitations. However, if there was any indication of fraud, the IRS could potentially investigate further, though this is less common for cases so far in the past.
To address any lingering concerns, you might consider consulting with a tax professional. They can review your specific situation and advise you on any potential actions you should take. This will help ensure your tax matters are in order and provide peace of mind moving forward.
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