May a taxpayer participate in the settlement initiative even if the three-year period of limitations on assessment has expired?
A.3 Possibly. The Service has determined that the six-year period of limitations on assessment under IRC Section 6229(c)(2) or 6501(e) may apply to those taxpayers who omitted income on their return. If the taxpayer’s period of limitations on assessment is still open, the taxpayer may participate in the settlement initiative. The Service will require the taxpayer to agree to extend the period of limitations on assessment, however, if it would otherwise expire within 12 months after the election is filed.
