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Is The IRS Running Out of Time To Collect From You?

The IRS only has 10 years to collect from you.

So why are we still talking about 2010???

I have helped so many Taxpayers resolve their IRS debt simply by reviewing their account transcripts. The IRS does not have forever to collect what you owe them. They have 10 years from the date of assessment. This is commonly referred to as the collection statute expiration date, or CSED. The clock starts with the date the tax has been assessed. This means that it is beneficial for you to file your tax returns on time.

I have taken a cursory look at intake forms and wondered why Taxpayers were still trying to resolve debts from tax years 15-20 years ago. While there can be many reasons why those old years may still be in play, one of them is that the 2008 tax return was not filed until 2012…..WHY…WHY…..WHY….. The debt from that year could have been off of the table for good, but NOOOOOOOOO…… You want to give the IRS an extra 4 years to collect… Do not do this. File on time in order to start the clock. If you need to amend, no worries. An amendment will not extend the collection statute my friend.

Another reason we still may need to address tax years older than 10 years is because you have submitted offers in compromise, filed a bankruptcy or done something else to stop the clock from running. If you requested an offer in compromise for 2010-2012 and it took 3 years for them to say no, then you added 3 years to the 10 years they originally had to collect. Many times, this is a terrible idea. When determining the best way to resolve your debt, there is much more to consider than your income and assets.

3 ways to avoid giving the IRS MORE TIME to collect your tax:

  1. Prepare and file your income tax returns on time
  2. Review your tax transcripts to determine when the collection statute expires on each tax year
  3. Do not submit offers in compromise or bankruptcies without the help and analysis of a professional.
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