How Long Does the IRS Have to Collect a Tax Debt? NYC Tax Resolution Lawyer Explains

Important Timeframes to Know for IRS Tax Debts: New York City Tax Resolution Lawyer

Under both federal and state law, there are time periods to make any type of claim.  These are known as the statute of limitations period.  If a claim is made outside of the statute of limitations period, the claim cannot be pursued and may be procedurally barred in a court of law.  This includes for IRS tax debt claims.  Like all other claimants, the IRS must also make the claim within the statute of limitations period or otherwise be barred.  Learn about the IRS’ statute of limitations for a tax debt in this post from our New York City tax resolution lawyer.

How Long is the Statute of Limitations for a Tax Debt?

The statute of limitations for a tax debt is 10 years from the date of the debt assessment.  This means that, once the IRS has given a tax assessment against a person, the IRS has 10 years to commence an action to collect those tax debts.  This means that the IRS can also use wage garnishments, liens, and other devices to satisfy the tax debt.  This must be done within 10 years or an action commenced within 10 years.

What Stops the Statute of Limitations from Running?

A stop or pause to the statute of limitations is called a “toll.”  There are several different ways to “toll” the statute of limitations for a tax debt.  These include the following:

  • Appealing the tax assessment;
  • Filing for bankruptcy and getting an automatic stay;
  • Making an offer in compromise;
  • Commencing a lawsuit against the IRS for the tax assessment at issue;
  • Requesting a due process hearing;
  • Entering into an installment agreement which expressly provides the statute of limitations will toll or pause; and
  • Entering into an agreement with the IRS to toll the statute of limitations (i.e., to investigate whether the debt actually exists).

When the Statute of Limitations does NOT Apply

If the tax assessment is derived from a false filing or fraudulent filing, there is no statute of limitations to collect the tax debt.  This means that if a person is trying to evade taxes or take other willful attempts to evade the tax debt, the IRS will be permitted to seek compensation indefinitely and take as long as necessary to recover all compensation.

The Timeframe to Recover an IRS Tax Debt Can be a Defense in Your Claim

If you have been hunted by the IRS for over 10 years for a tax debt, you may be able to use the statute of limitations as a defense to wipe your remaining liability clean.  There is a lot that goes into tax resolution and it can be a complicated maze with many pitfalls.  Call our experienced attorneys at SAMUEL & STEIN today to learn how we can help you successfully navigate this matrix of tax laws and achieve financial freedom by dialing (646) 480-2149 or use the convenient “Evaluate Now” box on our webpage.  Together we can help answer your questions and protect your rights.

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