A taxpayer filed their Year 1 tax return on March 15, Year 2. The return reported gross income of $100,000 and tax liability of $20,000. The taxpayer inadvertently omitted $26,000 of gross income from the return. The IRS wishes to assess additional tax. What is the latest date the IRS can assess additional tax for Year 1?

First, for a return filed early (March 15), the statute of limitations clock begins on the due date (April 15, Year 2). Second, the general statute is 3 years. However, if the taxpayer omits gross income exceeding 25% of the gross income stated on the return, the statute is extended to 6 years. Here, omitted income ($26,000) is 26% of reported income ($100,000). Therefore, the 6-year statute applies. April 15, Year 2 + 6 years = April 15, Year 8.