Comments on: IRS Debt not a lifetime sentence – Statute of Limitations on Collections

By: Betty

Betty — Mon, 29 Sep 2008 17:50:42 +0000

Does the time the IRS takes to decide on an installment payment plan extend the statute of limitations? I filed for an installment agreement in June, and they still haven't finalized the agreement yet. The agent I'm dealing with is a real stickler and nitpicking over my small self-employment income of less than $500.00 a month after expenses. They still call me occasionally and ask for more information about my income and banking. I don't like to tell them this information over the phone. I've been entirely open and honest with them but I'm afraid that I could inadvertently incriminate myself somehow by giving them figures over the phone. Today the agent called and said she has to get her manager to review the case before it's finalized. This is what she said a few weeks ago. It seems to me like they're dragging this out. I do owe a very large debt from 5 years ago when I was earning over 400,000 a year, but I'm not now, and I don't have much of anything. I've suffered complete financial ruin.

By: Darrin Mish

Darrin Mish — Tue, 12 Aug 2008 15:28:47 +0000

Cindy,

I assume you mean that you had an Installment Agreement back in 2005 not an Offer in Compromise. If you had an Offer in Compromise, once you get finished paying the Offer amount the tax liability is cleared to zero. If you have an Installment Agreement, it does not toll the collection statute and the rule of thumb is that the CSED lasts ten years from the date of assessment.

By: Darrin Mish

Darrin Mish — Tue, 12 Aug 2008 15:25:41 +0000

Cathy,
Probably the best thing to do would be to have a tax attorney inquire of the IRS by using a Freedom of Information Act (FOIA) request. Only then can you get a true picture of what the Collection Statute Expiration Date (CSED) is. But…if you can't afford that or want to do it yourself, you can call the IRS at 1-800-829-1040 and request that they send you a "Record of Account for that particular tax year. A rule of thumb is that if it doesn't show a balance anymore, then the CSED has passed. Often times it will actually show on the transcript that the CSED has passed and the balance has been cleared to zero.

As for remarrying…your new spouse would never be liable for your past tax debts however, if you were entitled to a refund after filing a joint return, you would need to file an Injured Spouse claim to make sure that he would get his proportionate share of the tax refund.

By: Cathy Chambers

Cathy Chambers — Tue, 12 Aug 2008 12:10:12 +0000

my husband died suddenly in 1995 and at that time the irs was holding our refunds due to a tax we owed from 92, we only owed 2,000on it but i wasn't working and so i got ahold of irs and they said they would put me on the not able to pay..they said i would receive a reminder notice each year (which i never have) i'm afraid of what the pen. & int. may be facing me now…I receive my refunds each year with no mention…however my financial sit.hasn't change, if anything,i'm more in debt having to live with one income…i've also been told if i would ever remarry, irs would start billing my new spouse because of me filing married jointly again. is this true? and do you think i should contact them, or being i've never heard anything expect it was excuse???

By: CINDY WELCH

CINDY WELCH — Sun, 10 Aug 2008 17:58:18 +0000

We signed an OIC back in 2005 and do not seem to be making a dent in our debt with the IRS due to the penalties and interest. Is there a statute of limitations or are we just stuck to be paying this forever? We are unable to borrow this money so it is not an option?

By: Darrin Mish

Darrin Mish — Fri, 30 May 2008 23:01:14 +0000

One way is to call the IRS and ask them to send you a "Record of Account." Then you need to figure out ten years from the date of the LAST assessment. There are many, many things that can toll the statute which means that it can last past 10 years. The best way to know for sure is to hire someone who really knows how to calculate it. But….things to look for are: Offers in Compromise, Collection Due Process Hearings, Bankruptcies, and Innocent Spouse applications. But my no means is that a comprehensive list.

By: michelle berzett

michelle berzett — Wed, 21 May 2008 20:09:45 +0000

How can a person find out when the IRS would have created a substitute return? My husband did not file in 1993. Hate to call and ask IRS and get them fired up even more. Also how does a person know the date they say they created it is true?

By: Darrin Mish

Darrin Mish — Mon, 05 May 2008 14:08:21 +0000

There are many factors that can extend the collection statute of limitations. But if you really think about it, the 1999 tax year CANNOT be closed yet because the return wasn't even due until April 15, 2000. So you have a couple more years at best for that tax year. What I really think is that you need a professional to take a look at the entire situation and then advise as to the best course of action.

By: Kim

Kim — Mon, 05 May 2008 14:03:28 +0000

They have been keeping our taxe refunds for years due to an employer who said he was taking taxes out and didn't to our surprise from 1995. They even kept our 1063 refund this yr and say we still owe 895. Thought the stimulus check would get us finished off when last week they send me something that says we owe 1156 or so from 1999. Shouldn't all this be disappeared by now???? Finding it ridiculous and thought it should be and we should get our stimulus check !!!!

OUTRAGED

By: Darrin Mish

Darrin Mish — Thu, 17 Apr 2008 21:04:26 +0000

You shouldn't have to worry about it. But…..I've seen 1990 tax liabilities with open statutes still. The only way to be sure is to have someone (like me) get your transcripts thru a Freedom of Information Act request and check it out. As a pratical matter if the IRS isn't keeping your refunds, you probably don't have anything to worry about.