As for tax fraud what your attorney probably meant is that, if the IRS suspects criminal behavior on your part, it can pull and inspect your records back to the dawn of time (in order to establish a pattern of behavior). But with regard to liability, penalties, jail terms, etc., the Statute of Limitations applies as it does in any non-capital case.
So in other words, the IRS lawyer is entitled to determine that you opened the Cayman Islands account in 1975, but there's a limit to how far back he or she can go for the purpose of prosecution, in the sense that the $100K you transferred in 1975 is probably untouchable.
See § 6501. Limitations on assessment and collection. There are some limits defined, but in part ”(c) Exceptions”, the first three items are False return, Willful attempt to evade tax, and No return. In each cased, there is no time limit on the IRS.
(It doesn't seem to state here who gets to declare it's a “False return” or a “Willful attempt”, but I think we all know the answer to that question. ;-)