Choice "B" is correct. Unless there is a substantial 25% misstatement of income or fraud, the statue of limitations is generally three years from the later of the due date or filing date of a return. This adjustment is improper because there is no evidence of fraud or substantial misstatement and some of the years are old enough that the three year statute has expired.Choice "a" is incorrect. The adjustment is improper, but not because only the current year can be adjusted. Generally, the statute of limitations is for three years, and any of those "open" years can be adjusted. The three year statute of limitations has expired for some of the years in this question.Choice "d" is incorrect. It is not correct that there is no statute of limitations for claiming personal expenses as business expenses.Choice "c" is incorrect. It is not correct that this retroactive type of adjustment can circumvent the statute of limitations.