What is the IRS statute of limitations on collections?

Answer 1

Generally ten years, but there are several things that can extend this. Anytime the IRS cannot collect the debt, the statute of limitations is tolled, or stopped. This includes filing bankruptcy, filing certain appeals, filing an Offer in Compromise, or if you leave the country.

Answer 2

Statute of Limitations for what? Statute of Limitations for assessing additional taxes (audit) is generally 3 years from the date the original return was filed. Statute of limitations for collecting a debt is generally 10 years from the date the tax was originally assessed. There are many factors that can toll (pause) the running of the statute of limitations, so it may actually end up being longer than this.

Answer 3

Generally the statute of limitations for an IRS debt is 10 years from the date the tax liability was assessed. There are several things that can extend the statute of limitations however. Filing bankruptcy will extend the statute by the amount of time the taxpayer is in bankruptcy if the bankruptcy does not completely eliminate the tax liability. Submitting an Offer In Compromise will extend the statute as well. There are many other factors that affect the statute of limitations. If you have a question about your collection statute in relation to your tax liability, some experts offer a free tax consultation. Knowing when your collection statute expires can prove to be very valuable information for a variety of reasons.

Answer 4

First, there are many SOLs, both for different taxes and then separate ones for audit, assesment and collection...as you see a progression that added together can be a long time.

Depending on certain things, the audit one is normally 3 or 4 years. However, a substantial underpayment, normally more than 25%, can extend that too. And how the days are counted can be a bit strange..but more importantly, that they can be "tolled" (stopped), by many things, most noteably from when the Dept sends a notice, received or not, until you respond for example. So ignoring them while the time goes by doesn't work...the time ain't counting.

Payroll tax can be even a bit different, because those are trust funds that you hold for the State...the audit periods are normally more like 2 years to notify of an audit to see the proper things were taxed and paid over. But if it is a matter of your not payng over what you collected, then it is a criminal matter and a whole other set of rules may be invoked.

Importantly for many is to understand the SOL only starts to run when a return is filed. If you don't file, you are perpetually open and will never time out

Answer 5

This is more a "generally" answer than specific to any tax...although most have their own specifics, the generalities re,ain the same.

There are many SOLs..ones for reviewing return, ones for assesing the tax, and ones for collecting the tax assessed. Together than can make for a long time under any circumstances.

The SOLs are different for each type of tax.

For individuals on income tax, the first is generally 3 years from when you filed the return.

If there is a gross understatement of tax (25% or more), then the statute is 6 years.

There is no statute if fraud is involved. (Fraud can sometimes be considered by intentionally not paying any amount, especially over 25%, without any real legal support.

MOST IMPORTANT: The Statutes don't even start to run until a return is filed. (Didn't file, always open...no SOL argument available).

The way the time is counted gets complex. Many things toll (means stops) the running/counting of time...like the Govt sending a letter (responded to or claimed to have been received or not to what is/was your last known address with that Department), negotiating, etc. Generally holidays and such don't count either.

Commonly, a jeopardy assesment is issued before the SOL for assessment runs out. Specifically allowed by law if the Govt feels it is at "jeopardy" of losing out. These assessments are obviously very high and actually change your legal position as they are given the "presumption of correctness" and become what you then have to prove inaccurate by specific amounts.....rather than the Govt having to prove your return inaccurate.

A federal tax lien that has been recorded in the land records is good for at least ten years and thirty days. In some circumstances it can be recorded.

Answer 6

This is more a "generally" answer than specific to a State...most places are similar. There are many SOLs..ones for reviewing return, ones for assesing the tax, and ones for collecting the tax assessed. Together than can make for a long time under any circumstances. The SOLs are different for each type of tax. Some types of taxes - sales and payroll in particular almost never have an SOL as they are trust funds ine collects for the State, and become a criminal matter very quickly if not entirely paid over). For individuals, the first is generally 3 years from when you filed the return.

If there is a gross understatement of tax (25%), then the statute is 6 years.

There is no statute if fraud is involved. (Fraud can sometimes be considered by intentionally not paying any amount, especially over 25%, without any real legal support. MOST IMPORTANT and experience has shown, the real answer to this question 99% of the time: The Statutes are irrelevant as they don't even start to run until a substantially complete return is filed. (Didn't file, your always open...no SOL argument available). No - ignore them long enough or wait them out - won't work - in fact really dumb and will make matters many, many times worse, both financially and legally...even criminally. The way the time is counted gets complex. Many things toll (means stops) the running/counting of time...like the Govt sending a letter (responded to or claimed to have been received or not to what is/was your last known address with that Department), negotiating, etc. Generally holidays and such don't count either. Commonly, a jeopardy assesment is issued before the SOL for assessment runs out. Specifically allowed by law if the Govt feels it is at "jeopardy" of losing out. These assessments are obviously very high and actually change your legal position as they are given the "presumption of correctness" and become what you then have to prove inaccurate by specific amounts.....rather than the Govt having to prove your return inaccurate.

Answer 7

It might vary from state to state.