Beating the Clock “IRS Statute of Limitations”

1.     There is an IRS statute of limitations on collecting taxes.  The IRS is limited to 10 years to collect back taxes, after that, they are barred by law from continuing collection activities against you.

2.     The IRS 10 year window to collect starts when the IRS originally determines that you owe taxes – that is usually when you filed your tax return, or when the result of an IRS audit becomes final.

3.     You can unknowingly give the IRS more time to collect.  The filing of an offer in compromise, innocent spouse request, collection due process appeal or bankruptcy all gives the IRS more than 10 years to collect.  Each of these acts extends the 10 years during the time they are pending.  

4.     IRS tax liens become legally unenforceable when the collection window closes.  After the collection statute of limitations expires, the IRS will no longer have a valid lien on your property, including your house.

5.     After the IRS can no longer collect from you, they will make an internal adjustment to their books and credit your account for the amount of unpaid taxes, interest and penalties. IRS account transcripts can be obtained verifying that you no longer owe them – they will contain a line entry along the lines of “Time Frame To Collect Expired” and a resulting zero balance.

From the date of assessment, the IRS usually has only 10 years to collect on tax debts. IRC §6502(a)(1)  Exceptions to the 10-year rule include:

1.     Requesting an Installment Agreement extends the time period during the request. The rejection or termination of an Installment Agreement will also extends the time period

2.     Filing an Offer in Compromise extends the collection period by the amount of time the offer in being considered, plus 30 days.

3.     Filing of bankruptcy extends the collection period for its pendency, plus six months.

4.     Filing a Collection Due Process extends the time period for the Hearing is pending.

5.     Consenting to Extend the Time to Assess Taxes extends the time for the period for the amount of time specified.

Trust Fund Recovery Penalty

The IRS has only three years from the date the 941 was filed or the 15^th day of April, following the year in which the taxes apply to make a personal assessment. Nota bene, the IRS frequently misses this statutory period. Accordingly, it is extremely important that you understand your rights before signing any agreement.

Aggressive Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in payroll, income and sales tax controversies for individuals, contractors, restaurants, bodegas and professional practices. 

Mission Statement Our mission is to win every tax case; to bring all of our tax, advocacy and legal expertise to every fight, and to serve our clients with integrity, honesty and perseverance.

Effective We settle contested tax audits, compromise tax debts and can resolve all marital tax issues including innocent spouse relief and separation of liability. 

Reasonable-Rates All tax representation is provided by a Federal Tax Practitioner and Licensed Attorney. To schedule a FREE face-to-face consultation, contact Selig & Associates today.