How much time does the IRS have to collect?

The time to collect is called the statute of limitations. When that time expires, the tax liability dies with it. It does not matter if the tax is one million dollars or ten cents, when the statute of limitations expires, taxpayer wins.

Ten Years to Collect. Section 6502 of the Internal Revenue Code limits the time the IRS can collect to ten years from the date the IRS puts your tax liability on its books, known as the date of assessment. The precise date of assessment can be obtained from the Master File or on column four of an IRS Tax Lien. 

Warning: Tax problem solving is like a chess game. Each move has consequences. A taxpayer can unknowingly extend the statute of limitations. For example, an offer in compromise extends the statute of limitations for the IRS to collect, so it may be wise to instead choose a settlement alternative that runs out the clock.

Furthermore, choosing the right appeal is critically important because certain IRS appeals extend the time to collect, while others do not. For example, in some cases it’s better to intentionally blow the deadline to file a Collection Due Process Appeal, and later file an Equivalent Hearing to prevent extending the deadline to collect. 

Also, guard against a Revenue Agent’s attempt to trick you into signing a waiver to extend the time to collect. An experienced tax lawyer will protect your interests, and will know what action to take and the best time to take it.

You may find hope by giving us a call to discuss your situation initially free of charge, or get our free book, How to Get Tax Forgiveness