How long does the IRS have to collect taxes?

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In my Middleburg, FL office, I’ve had people ask the question “How long does the IRS have to collect the taxes I owe?” What they really want to know is are they going to be running from this forever? The answer is no: the IRS only has 10 years from the date tax is assessed to collect it. There are a few things you can do that would cause the IRS to be allowed to have more time to collect but, in general, after 10 years the tax is unenforceable. Why is this important to you?

It is important to know what things you can do that will inadvertently cause the IRS to get more time. If you file an Offer-in-Compromise, a CDP (appeal) request, have a pending installment agreement, or file for bankruptcy, they will all freeze that 10 years and the clock stops, at least temporarily. The IRS is not allowed to try to collect money from you during these times, so it is only fair for that amount of time to get tacked on to the end of the 10 years.

That little nugget of truth is why it is important to not get sucked into an elusive promise of settling your tax debt for “pennies on the dollar” by those late-night commercials. The entire time the IRS is considering your offer-in-compromise the clock is stopped on the statute of limitations. You need a professional who will do the math and determine if you are even eligible for an offer-in-compromise before just throwing the application out there “just to see.” Why stop the clock on the statute of limitations if you’re not even eligible?

It is also good to know how much time is left to collect tax due because that could change your strategy. If there is only 6 months left on the 10 years you are going to want to react differently than if there are still 9 years left to collect. That is why it is critical to get your transcripts and have a complete picture of your tax situation before you make a move to resolve the problem.

If you have any questions about how the statute of limitations for the IRS to collect tax could affect your personal situation, please contact my Middleburg office at 904-600-3450.

Angela Yonge
Enrolled Agent
Acorn Bookkeeping & Tax, LLC
904-600-3450

Location: Middleburg, FL 32068, USA

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