Section 6502 of the Internal Revenue Code states that the length of the collection period after the assessment of a tax liability is 10 years. The expiration of the collection law ends the government's right to request the collection of liability. You have been audited by the Internal Revenue Service (IRS) and it has been determined that you owe money to the government. So, you might be thinking that you are now on the debt hook for good.
However, that's not exactly the case. Although not widely shared by the IRS, every IRS audit tax debt has a collection law expiration date (CSED). Generally speaking, the IRS has 10 years to collect an unpaid tax debt, after which the debt is canceled. Towards the end of the CSED, the IRS tends to be more aggressive in its collection efforts, hoping that the taxpayer will pay as much as possible before the deadline or agree to extend it.
In general, the IRS has 10 years from the date of evaluation to collect delinquent taxes and tax-related fees, although there are some exceptions. This 10-year limit is known as the Revenue Act Expiration Date (CSED) and frees tens of thousands of Americans from their tax liabilities each year. Generally speaking, the Internal Revenue Service has a maximum of ten years to collect unpaid taxes. Once that time has elapsed, the obligation is completely erased and removed from the taxpayer's account.
This is considered a “cancellation”. The ten-year period is recognized as a statute of limitations on fiscal balances or an expiration date of the collection statute, commonly known as CSED. Taxpayers can't easily identify this limitation because it's not in the best interest of the IRS to cancel a liability. Your ten-year term begins when you file your tax returns and owe taxes.
The IRS has three years from the date you file a tax return to evaluate any additional taxes that could result in IRS liability. They don't make the ten-year limit understandable to taxpayers for fear that the taxpayer will simply wait for time to pass. If you're choosing to delay collection and “wait for the deadline to pass,” you'll want to be prepared for the Internal Revenue Service's collection tactics to get tough. When the time for your CSED approaches, the Internal Revenue Service will become more aggressive in its actions.
Aggressive actions may include filing tax liens or issuing a tax lien on your bank accounts or salaries. The quickest tactic to prevent collections from occurring is to accept payment plans established by the Internal Revenue Service, also known as an installment agreement. Before deciding to take any matter into your own hands with the Internal Revenue Service, you should consult tax professionals who are experts trained in negotiating with the IRS regarding tax liability and the provision of tax breaks. In a nutshell, the statute of limitations for federal tax debt is 10 years from the date the taxes were assessed.
This means that the IRS must forgive the tax debt after 10 years. However, there are a few things to consider. As long as the IRS cannot currently collect any payments from you, and as long as you contact the IRS and wait for them to deliberate on your offer of a payment plan (OIC), the 10-year period for paying your tax debt will be stopped. Another is to have that tax expert establish a financially feasible installment plan with the IRS.
When the cause is reasonable and you can't make payments without compromising your basic living needs, the IRS will work with you to reduce your payments or even put your debt in a currently uncollectible state. As with most things tax-related, it can be a bit difficult to determine when the ten-year collection period of your tax debt ends. Once confirmed, a tax professional can help the taxpayer get the IRS to issue an official certificate of exemption from a federal tax levy or withdrawal of a tax. While it's supposed to start when the tax is originally evaluated, the CSED is the subject of frequent disputes between taxpayers and the IRS.
In addition, state tax agencies don't necessarily have their own Taxpayer Bill of Rights and can pursue state tax debt more aggressively than the IRS. For step-by-step instructions on what you need to do and how to do it yourself, book your IRS case strategy session with us today and review frequently asked questions about tax debt relief. Documentation proving the tax debtor is needed in cases where a federal tax lien is withdrawn or released, which is a necessary step to begin repairing financial and credit profiles. It will be the same date that appears on the formal notice you receive from the IRS, which details the amount you owe in your annual income taxes.
But is trying to wait for this period a viable strategy for resolving your tax debt? For most taxpayers, the answer is probably no, although there are certain situations where it might make a lot of sense to take this approach. If you find that you can't pay your taxes and you simply don't file them, the IRS will use existing information (such as a previous return and informational statements from employers and companies) to file an approximate replacement return in your name, without any of the applicable deductions you would normally make. advantage of. The latter of the two is often achieved through the IRS, which presents the taxpayer with agreements, such as installment agreements, that require the extension of the CSED.
Most people assume that once they owe money to the IRS, they must pay it back until the debt is fully resolved, no matter how much time has passed since the debt originated. In general, the IRS has only ten years to collect your assessed tax balance, but the agency exists to collect taxes and will use all available tools and methods to do so, including wage garnishments, levies and levies. . .