How long does the IRS have to collect a tax liability?

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There is very little mercy in the tax code.  One of the provisions, however, offers the taxpayer who has had some difficult times a bit of relief.  It’s called the statute of limitations on the collection of a tax debt.  In general, the IRS has 10 years to collect a past due debt.  (Internal Revenue Code Section 6502).  After 10 years, the debt is wiped out.  There are a number of ways that the statute can be extended, though.

 

  1. The 10 year period does not start to run until you file your return and the IRS assesses the tax against you.  Not filing a return and hiding for 10 years accomplishes nothing.
  2. The IRS can extend the 10 year period by suing you in Federal court. The IRS usually won’t do this and if it’s getting close to the 10 year mark and you don’t owe millions, the IRS may let the statute expire and you’re off the hook forever.
  3. Certain actions on your part may extend the 10 year statute: Some examples are as follows:
    1. Filing an Offer in Compromise
    2. Living outside of the United States
    3. Bankruptcy
    4. Requesting a Taxpayer Assistance Order
    5. Signing a Waiver Form
    6. Requesting a Due Process Hearing