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Statute of Limitations for IRS Collections

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Statute of Limitations for IRS Collections

When you owe back taxes to the IRS, the IRS can only go after you for a certain period of time. If they do not act within a 10-year period, known as the statute of limitations, then your debt will be wiped out. Afterwards, the IRS cannot legally collect the back taxes from you. Every year, the IRS loses its opportunity to collect back taxes from thousands of delinquent taxpayers.

When Does the Statute of Limitations Begin and End?

The statute of limitation starts when the IRS sends you a notice that you owe them money. It actually starts as of the date on the notice. And it ends 10 years from that start date.

Even if you attempt to hide from the IRS by not filing your taxes for 10 years, this does not end the statute of limitations because it has yet to start. Hiding from the IRS will not help you escape your tax liabilities.

Does the Statute of Limitations Toll?

This 10-years period may be toll, or paused in between. In other words, it may last more than 10 years. The statute of limitations will be tolled if you:

  • File for bankruptcy
  • File for innocent spouse
  • Come up with a repayment plan with the IRS
  • Are sued by the IRS
  • Are living outside of the United States for more than 6 months

Can the Statute of Limitations Restart?

Yes, the statute of limitations may restart after it has started. If you make a payment plan or an offer in compromise with the IRS, then they may have made you waived your statute of limitations rights.

However, the IRS is not allowed to force you to voluntarily waive your statute of limitations rights after it has expired. In other words, the IRS cannot force you to pay back your taxes after the 10-year period has passed.

Do I Need a Lawyer?

A tax lawyer can help you avoid any complications associated with statute of limitations and your back taxes. If the IRS harasses and forces you to waive your rights to pay them back, a tax lawyer can make them stop.

Photo of page author Mabel Yee

, LegalMatch Legal Writer

Last Modified: 05-13-2015 11:14 AM PDT

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