Audits

• After you file taxes, the Internal Revenue Service has three years to audit your tax return and assess additional taxes. The IRS checks your tax return against records it receives from employers and financial institutions, such as W2 forms and 1099 forms, to ensure that you are reporting all of your income. It may also conduct an audit if your tax return triggers red flags because of taking certain deductions or taking an unusually high number of deductions.
  
  

Collections

• In most cases, the IRS has 10 years from the date you file your taxes to collect the unpaid taxes. This statute of limitations includes the time the IRS takes to audit your tax return and determine that you owe additional taxes. For example, if the IRS audits your return after two years, it has an additional eight years to collect the new tax amount; it does not get a full 10 years after the audit.
  
  

Refunds

• Taxpayers only have three years to collect a refund after filing taxes. Thus, it is best to file taxes even if you are not legally required to so that you can collect any refund that is due to you. If you discover an error more than three years after your return is filed, you will not be able to obtain your refund, even if you file an amended tax return.
  
  

State Laws

• Etaxes.com reports that laws regarding the statute of limitations for tax collection vary from state to state. If you receive a letter from your state treasury informing you that you owe additional taxes, consult a tax attorney about the statute of limitations. Your state may allow tax collection for a longer period of time; some states do not have any statute of limitation regarding collecting state taxes at all.