Statute of Limitations on IRS Collections – Has your Statute run out – IRS cannot collect tax – IRS Tax Experts – Former IRS
Yes even the IRS has a certain amount of time to collect the tax.
As a Former IRS Agent, I carefully watched all statutes within my working inventory. Should I ever let a statute expire it could mean my job and a demotion of my Group Manager.
With that said, let’s review the IRS statute of limitations on IRS collection cases.
Generally, IRS has 10 years to collect the money from a taxpayer. That ten years starts when the case is processed through the IRS C.A.D.E. computer.
For an example, if you were to file your tax return on April 15th, it would normally take 6 weeks to post on the IRS computer system. In the given scenario, the date of assessment that IRS would create would be around June 1st.
In the aforementioned example, June 1st begins the running of the ten year statue of limitations. This is called in IRS terms the TC 150 date. You can finds out your statute date by calling the IRS or asking for a transcript.
If a Federal Tax Lien has been filed, you can find that date of assessment right on the tax lien.
There are events, filings and rules that extend the Statute of Limitations.
The filing of a Offer in Compromise.
The filing of an Offer in Compromise will extend the statute of limitations on collection by the time it is pending OIC plus 30 days. The IRS can take four to twelve months to work your offer and sometimes longer.
You sign a voluntary Waiver- Form 900.
If you has volunteered to extend the statute of limitations you did so on a Form 900. The date of the extension is found on the top of the waiver form. You should never be pressured to sign this Form and if asked by the IRS, consult a tax expert.
The filing of a Collection Due Process Appeal.
Timely responding to an IRS Final Notice of Intent to Levy also known as a Collection Due Process hearing ( lumped together ) will extend the time the IRS has to collect while your hearing is pending. It is extended for the time that the case was in Appeals.
Filing of any Bankruptcy.
Bankruptcy extends the statute of limitations on collection by the time you were in bankruptcy plus (6 ) six months. If you filed bankruptcy but did not eliminate all of your tax liabilities, the IRS will have more time to collect the non-discharged taxes from you. Sometimes not all taxes are discharged in the bankruptcy. Consult a tax expert.
Filing for Innocent Spouse Relief.
The collection period for the innocent spouse is suspended from the filing of the request for Innocent Spouse Relief until the 90 day period for petitioning the Tax Court expires. If a Tax Court petition is filed on an IRS denial, time is tolled until the Tax Court decision becomes final, plus 60 days.
The filing of a Taxpayer Assistance Order Form (911).
If you needing a Taxpayer Assistance Order ( TAO ) to stop the IRS in there tracks, the filing of Form 911 will suspend the statute of limitations on collection while your case is pending for review. This is a great IRS stop measure!
Installment agreements. ( defaulted Appeals )
If the IRS refuses or defaults an installment agreement, you have the right to appeal that decision. If you do, the collection time frame is extended during the Appeal.
If you are at the end of your statutory time for IRS to collect, always consult a tax professional.
If you call the IRS they have the right to reactivate your case and return it to the field for enforced collections. Tax Professionals have special telephone numbers to call that will not reactivate your case.
