Collection Statute Expiration Date

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Generally the IRS has ten years from the date tax is assessed to collect the unpaid liability. Once a statutory expiration date is reached, the IRS must then abate the tax and release any liens filed against the taxpayer's property. This action is rarely automatic. Frequently the IRS will continue collection activity after a statute has expired, either out of administrative backlog or a perception of taxpayer ignorance. An important taxpayer “tip” in handling any outstanding tax liability that spans multiple tax years, is to designate any voluntary payments to the most recent assessments. The reason being that these assessments have the longest statutory time frame subject to collection activity. Earlier assessments have shorter statutory time periods. If a taxpayer does not make a designation of a voluntary payment, the IRS will always apply the payment to the tax period with the shortest time remaining under collection statutes. This is in the best interest of the government not the taxpayer. Frequently the IRS will apply voluntary payments this way out of default regardless of any taxpayer designation. It’s important to document any designation clearly on the payment.

However, there are some actions that can “toll” or stop this ten year period from running, thereby extending the time the IRS has to collect any unpaid liability. The most common actions that extend the statutory collection period are: a pending bankruptcy, a judgement or litigation in tax court, a collection due process appeal, a pending offer in compromise, any time the taxpayer resides outside the U.S. and when the taxpayer voluntarily signs a waiver extending the collection statute. Other less common actions pertain to military deferments, tax assistance orders and estate tax liens. Because each taxpayer’s situation is unique and may possess its own complexities, it’s important for the taxpayer to not assume that a tax liability has expired just because ten years has passed. Professional assistance is important.

View the video below for even more information about the Collection Statute Expiration Date.

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Pings on Collection Statute Expiration Date

November 24, 2008

Comments on Collection Statute Expiration Date

August 3, 2008

Mike @ 8:23 pm #

If I'm audited and have to pay additional tax, does the statute of limitations start to run when the agent bills me for the additional tax or when I filed my return for the audit year?

October 8, 2008

Cory @ 6:00 pm #

Would having a 'prior tax abated' (verbiage taken from a transcript) extend the 10 statuatory period? I was told my an IRS representative that because that was done, the CSED was from that date and not the date of initial assessment.

Thanks for the information!

Cory

October 27, 2008

ed @ 1:52 pm #

if i submit a return is there a time limit that theirs has to review my claim and respond to it? I submitted a late return and owed taxes and it took them over two months to respond. ed

January 26, 2010

Robert Edwards @ 2:56 am #

I have an installment agreement since 2004. I was not aware of the collection statue. I am not aware of any waiver. Is there a way to find out what my CSED is? If any waiver was signed? If my CSED is 2014 that would be a big relief, would I need a tax attorney to defend my case with the IRS?

February 20, 2010

Libby @ 7:14 pm #

Hi, I need to know am I able to use the CSED for my student loans which I have been paying for over ten yrs but wd my deferments stop the statute from running.

February 21, 2010
January 5, 2011

Rio @ 2:55 pm #

Hello. What exactly is an "assesment date"? I set up payment arrangements in 2008. Will the statute of limitations start then or the the year that the taxes was owed?

February 8, 2011