So just how long does the IRS have to collect on a past due balance they say you owe? The answer may surprise you.
Most people believe that the IRS can collect against you until a balance is completely satisfied. In actuality the IRS generally has 10 years to collect on an outstanding tax delinquency. The IRS calls this 10 year end-date the Collection Statute Expiration Date or “CSED.” These are also vital to calculating how much a Streamline Installment Agreement will be. Additionally they factor into the reasonable collection potential in settling your IRS balance.
Certain events will however stop the clock on that 10 year timeframe and this could mean that the IRS has more time to collect on that balance they say you owe. Generally these “tolling” events prevent the IRS from collecting against you during the period they are in effect.
Common Tolling Events:
- An IRS Offer is Submitted – CSEDs are tolled during the period of the offer and any appeal.
- A request for a payment plan in being reviewed – CSEDs tolled while request is reviewed
- Bankruptcy is Declared – Duration of Bankruptcy + 6 additional months
- A Collection Due Process Hearing (CDPH) is requested – Duration of the CDPH request
While this is a not a comprehensive list it should give you an idea of the most common ways a CSED may be tolled.
Other Ways the IRS Can Continue to Collect
In rare cases the IRS could take you to court and reduce their tax claim to judgment. This action normally extends the time frame the IRS is allowed to collect against you up to 20 years. The IRS will balance the cost of doing this against the odds they could collect on future amounts.
Determining Your CSEDs
Each tax year is going to have its own Collection Statute. The most effective way to determine your Collection Statute dates is to call the IRS and request they provide it to you.
We want to provide you all the facts. Listed below are some links and resources you may find useful if you are considering further research on Collection Statute Expiration Dates
Wall & Associates, Inc. is one of the premier tax representation firms in the country. Through a targeted case review our office is able to provide our clients top tier tax representation services. If you or someone you know needs competent tax help don’t hesitate to visit us at WallandAssociates.net.