Statute of Limitations
The IRS has 10 years from the date of assessment (usually close to the filing date) to collect all taxes, penalties and interest from the taxpayer. The taxpayer does not owe the IRS anything after the 10-year date has passed.
As with all IRS rules, there are exceptions to this rule. Some examples are, if the taxpayer agrees in writing to allow the IRS more time to collect from them or if the taxpayer files bankruptcy during the 10 year period. In both of these situations the period for the IRS to collect is extended for a specific time.
Taxpayers that are approaching this 10-year date should request copies of their IRS transcripts to verify the assessment date, so they can accurately compute when the 10-year statue to collect will expire. If the IRS is attempting to collect a tax liability which has expired under the 10 year statue, then the taxpayer must inform the IRS in writing that they no longer have the right to collect this tax liability. If the taxpayer is correct, the IRS will write off the tax liabilities which have expired. We are able to do this for you, as it is best to allow a tax professional to speak for you with the IRS.
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