A taxpayer filed their Year 1 individual income tax return on April 1, 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. No fraud was involved. What is the latest date the IRS can assess additional tax for Year 1?

IRC §6501(e) provides a 6-year statute of limitations if the taxpayer omits from gross income an amount properly includible therein which is in excess of 25% of the amount of gross income stated in the return. Here, $26,000 > 25% of $100,000 ($25,000). The return filed on April 1 is deemed filed on the April 15 due date. Thus, the statute expires 6 years from April 15, Year 2.