1. Sally and Tom were married and properly filed a joint return for the year 20x4 on March 30, 20x5. The return reported $200,000 of gross income and a tax liability of $40,000. A total of $37,500 in taxes had been withheld from their salaries during the year.

(a) How much tax can the IRS assess immediately?

(b) On what date is the return considered to have been filed?

(c) Would your answer to (b) be different if April 15, 20x5 were a Saturday or Sunday?

(d) What would be the last date on which the IRS could assess additional tax for the year 20x4?

(e) Would your answer to (d) be different if April 15, 20x5 had been a Saturday of Sunday?

(f) What would be the last date the IRS could assess additional tax if— 

(i) Sally and Tom filed an amended return on April 10, 20x5?

(ii) Sally and Tom filed an amended return on August 30, 20x5?

(g) Now assume that April 15, 20x5 was a Saturday. Sally and Tom filed their joint return on Monday, April 17, 20x5. What would be the last date the IRS could assess additional taxes for the year 20x4?

2. Now assume that the return was mailed on Tuesday, April 15, 20x5, postmarked that day, and received by the IRS on Friday, April 18, 20x5.

(a) On what date was the return deemed filed?

(b) What would be the last date on which the IRS could assess additional taxes for the year 20x4?

3. Now assume that Sally and Tom did not file a return for 20x4 at all.

(a) How much tax can the IRS assess immediately?

(b) What would be the last date on which the IRS could assess additional tax?

(c) The IRS prepared a Substitute for Return for Sally and Tom. What would be the last date the IRS could assess additional tax?

4. Now assume that Sally had been paid an additional $60,000 for some consulting work that she had done. But Sally and Tom had inadvertently failed to report it on their return.

(a) What is the last date the IRS could assess additional taxes?

(b) Would your answer to (a) be different if Sally and Tom had intentionally failed to report it on their return?

(c) Would your answers to (a) or (b) be different if the amount were $40,000?

(d) Now assume Sally and Tom were overwhelmed with guilt for their intentionally failing to report the income and asked you whether they should file an amended return reporting the income. What would you advise them and why?

(e) Assume that they did file the amended return, reporting the income, on August 15, 20x5. Would that affect your answer to (b)?.