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.

Collection Statute Expiration Date is a post from: IRS Tax Problem Solver Blog - IRS Help

It's a fairly well kept secret that the IRS does not have the rest of your life to collect tax liabilities that you may owe. Most taxpayers with tax problems think that the problem will hound them until the day they die. I'm here to tell you that that is untrue. You see the law says that they have 10 years from the date of the assessment to collect the tax. Now there are lots of exceptions and events that can stop or "toll" the running of the Collection Statute Expiration Date (CSED). Learn more about these time limitations in the video below.

IRS Collection Statute of Limitations – What's That? is a post from: IRS Tax Problem Solver Blog - IRS Help

Do you owe back taxes? Are you afraid to go to the mailbox for fear of receiving the dreaded tax bill? If you do owe back taxes, and your bill is accruing both penalties and interest, you have IRS Problems. To help alleviate you and your family's financial and emotional burdens, it is important to seek help from a tax professional.

10 Years

In general, the IRS has 10 years to collect back taxes. This 10 years starts from the day your tax bill is finalized.  Your tax bill can be finalized in a number of different ways: If you have a balance due on a tax return; The amount assessed after an audit or a final proposed assessment. Remember that if you did not file a tax return, the IRS will create a substitute return for the taxpayer and the statute of limitations will begin from the date set by the IRS.

It essential that you are aware of the Collection Statute Expiration Date (CSED).  This date is helpful if you are working to resolve your tax debt. If the CSED is soon, it is important not to do anything that would actually extend the statute.  The IRS may start aggressive action to get you to pay your tax debt before the CSED.  Do not sign anything as it may extend your statute of limitations.

Remember, if the IRS does not get payment in full, including interest and penalties, in 10 years time, the balance remaining disappears as the statute of limitations has expired.

Statute of Limitations Extensions

The statute of limitations can be extended if you chose to resolve your tax debt by filing for bankruptcy or obtaining an Offer in Compromise.  Another factor that could affect the date is leaving the U.S. for an extended period of time.  It should be noted that if you have been assessed a tax debt because of having been convicted of tax fraud, your tax debt will never expire.

The statute of limitations can also be extended by agreement between the IRS and the taxpayer.  This agreement has to be done prior to the expiration of the 10-year period and requires the taxpayer to sign a waiver extending the statute of limitations to the date specified on the waiver.

If you are in need of clarification of any of these issues, are looking for IRS Help or have other IRS Problems you need to discuss, our knowledgeable staff will be glad to assist you.  We can help you solve your IRS Problems. Contact our office today.

IRS Debt not a lifetime sentence – Statute of Limitations on Collections is a post from: IRS Tax Problem Solver Blog - IRS Help

The truth is there is a time limit. It�s called the Collection Statute Expiration Date or CSED. In short, the IRS only ten years from the date of assessment of the tax to collect it. Does this mean all you have to do is ignore them for ten years? Not hardly. Learn more about the Collection Statute Expiration Date and how it might be the IRS Tax help that you�ve been waiting to end your IRS Problem for good! Click on the video below.

Is there a time limit for the IRS to collect what I owe or will this just go on forever? is a post from: IRS Tax Problem Solver Blog - IRS Help