IRS Statute of Limitations to Collect
It’s bad enough to owe taxes but even worse to worry for the rest of your life about the IRS collecting. Fortunately, there is an IRS statute of limitations applicable to actions on back taxes. However, like many areas of the tax world, the exact amount of time you have isn’t always straightforward and can vary depending on the circumstances. Further, this doesn’t mean it’s a good idea to cross your fingers and hope your tax debt goes away. Here’s what you should know about the IRS statute of limitations and back taxes.
The Length of Time Varies
In many cases, the collection period is ten years. However, it can become more than ten years in certain situations. For example, if the collection period was suspended for one or more time periods, it could last longer than ten years because the time of suspension does not count toward the 10-year deadline. It could also become extended if the IRS is considering an installment agreement or in other situations such as living outside of the US for at least six months.
When Does the IRS Statute of Limitations Start?
Does the statute of limitations on back taxes begin on the date you owe? On the date you file your taxes? Or on some other date the IRS marks on a calendar? In most cases, the clock starts ticking on the date of the tax assessment, which is the date the IRS signs the applicable form, such as written notice to you of the bill. If for some reason, you didn’t file a return, the limitations period will begin when the IRS creates a deficiency assessment and substitute return.
How 10-Year Limitations Can Help
Although it could vary and the statute of limitations could end up longer than ten years, the good news is that this means you won’t owe the IRS forever. The statute of limitations on IRS collections means you might be able to avoid collection efforts once the ten years are up. There are many exceptions and situations where the IRS could have longer than ten years, so it isn’t a good idea to attempt to just hide for a decade hoping your tax bill will disappear.
When There’s No IRS Statute of Limitations
On the other hand, there isn’t any deadline at all for the IRS to collect if you have filed a false or fraudulent return, attempted to evade tax, or failed to file a return. Because these situations are considered willful, fraudulent returns or intentionally not filing taxes, there is no IRS statute of limitations.
NYC Tax Attorney with Experience
If you owe back taxes and have questions about the IRS statute of limitations, a NYC tax attorney with Mackay, Caswell & Callahan, P.C. has the experience to help. Fill out our online contact form or call 844-MCC-4TAX (622-4829) or speak with another experienced tax lawyer from one of our other offices in Albany, Rochester, Syracuse, Utica, and Watertown.
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