What Is the Statute of Limitations for IRS Collections?

Understanding IRS Statute of Limitations on Collections

As a taxpayer, understanding the statute of limitations for IRS collections is crucial to managing your financial obligations. This time limit restricts how long the Internal Revenue Service can pursue unpaid taxes, but the rules can be complex. You may wonder when the clock starts ticking, what exceptions exist, and how to protect yourself from prolonged collection efforts. In this article, you'll learn the standard timeframes for IRS collections, situations that can extend or suspend the statute, and steps you can take to ensure your tax matters are resolved within the appropriate window. Arming yourself with this knowledge is essential for navigating potential IRS collection actions with confidence.

Call Turner Business Solutions at (316) 285-0125 if you need assistance with an IRS notice. You can also schedule a free consultation online.

When Does the Clock Start Ticking on the IRS Collections Statute of Limitations?

The IRS Statute of Limitations on Collections refers to the time limit within which the Internal Revenue Service (IRS) can legally pursue the collection of unpaid taxes. This statute is a crucial aspect of tax law that protects taxpayers from indefinite collection efforts while also providing the IRS with a reasonable timeframe to recover owed taxes.

The 10-Year Rule

Generally, the IRS has 10 years from the date of tax assessment to collect unpaid taxes. This period is known as the Collection Statute Expiration Date (CSED). Once this 10-year window closes, the IRS can no longer use its administrative collection powers, such as liens, levies, or wage garnishments, to collect the debt.

Starting the Clock

The 10-year period typically begins on the date the tax is assessed, not the date the tax return was due or filed. For example, if you filed your 2022 tax return on April 15, 2023, and the IRS assessed the tax on May 1, 2023, the collection statute would expire on May 1, 2033.

Exceptions and Extensions

It's important to note that certain actions can extend or suspend the statute of limitations. These may include:

- Filing for bankruptcy

- Submitting an offer in compromise

- Requesting a Collection Due Process hearing

- Living outside the United States for an extended period

Conclusion

Understanding these exceptions is crucial for taxpayers facing IRS collection efforts. We recommend you consult a tax professional if you owe the IRS back taxes or have several years of missing tax returns.

Call Turner Business Solutions at (316) 285-0125 if you received a concerning IRS or State notice and need assistance resolving it. You can also schedule a free consultation online.