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Does IRS Tax Debt Ever Expire?

The statute of limitations on the collection of IRS tax debt is generally ten years. After the Collection Statute Expiration Date (CSED) passes, the IRS can no longer enforce the tax debt.

The ten-year period begins once the tax is assessed. Tax assessment can occur in various ways, such as when you file a tax return and don’t pay in full or when the IRS makes a deficiency assessment. If you don’t file a tax return, the IRS has unlimited time to assess tax, and the ten-year collections period won’t start until the tax is assessed.

How to Determine Your CSED

The collections period can sometimes extend beyond ten years. If you request an installment agreement, submit an Offer in Compromise, declare bankruptcy, or if certain other events take place, the collections period is temporarily suspended. Your CSED will be moved back to account for this suspension period, giving the IRS more time to try to collect from you.

It’s also possible to have several different CSEDs. If you owe tax debt for multiple tax years, you’ll probably have several different CSEDs.

You may need to request your tax transcripts to determine your CSEDs. A tax attorney can help you with this process.

What If Your Tax Debt is About to Expire?

If your CSED is approaching, the IRS may take whatever steps they can to collect your tax debt. This could include levying your wages, bank account, or other assets.

You can sometimes negotiate a partial payment installment agreement in these situations. Unlike a regular installment agreement, these agreements won’t pay the full amount of your tax debt. However, partial payment installment agreements are generally harder to get than regular installment agreements. The IRS may expect you to sell certain assets or borrow against your equity before agreeing to a partial payment installment agreement.

Another tactic the IRS can use is to ask you to voluntarily extend your CSED. You should be very careful if the IRS asks you to sign a waiver of the CSED because it may not be in your best interests. Consult a tax attorney before you sign anything to make sure you are getting a fair deal.

The Gartzman Law Firm can help you with back taxes and other IRS tax problems. Use our contact form to request a consultation with an Atlanta tax resolution attorney.