In April 2014, Dan is audited by the IRS for the year 2012. During the course of the audit, the agent discovers that Dan's deductions for business travel and entertainment are unsubstantiated and a $600 deficiency assessment is proposed for the tax year 2012. The agent also examined some prior year returns. The agent discovers that Dan failed to report $40,000 of gross business income on his 2010 return. Gross income of $60,000 was reported in 2010. The agent also discovers that Dan failed to file a tax return in 2005.
Will the statute of limitations prevent the IRS from issuing a deficiency assessment for 2012, 2010, or 2005? Explain.