The IRS has a statutory limit of 10 years to collect on a tax debt. The statutory period initiates the date the tax is assessed, and the statutory required notice letter is sent. If this collection statute date expires, there is a possibility of your tax debt being eliminated. However, Statute of Limitations of IRS debt can be extended in many instances.

What Circumstances can extend the Statute of Limitations on Tax Debt?

In some circumstances, the Statute of Limitations on tax debt can be extended because the collection period has been suspended for a period of time – the suspension period will not count toward the ten years.

Suspension could happen for several reasons. These include:

  • If you filed for bankruptcy and the court issues an automatic stay preventing the IRs from taking collection from you.
  • The IRS is considering your request for an installment agreement, offer in compromise or innocent spouse relief or you are filing an appeal of the rejection of an IRS installment agreement or offer in compromise.
  • Any period longer than six months in which you live outside the U.S.
  • The IRS is legally barred from taking collection from you.

Additional Circumstances that can extend the Statute of Limitations on Tax Debt

Other than suspension, the Statute of Limitations can last longer than ten years in the following circumstances:

  • If you voluntarily extend it.
  • If you enter an installment agreement with the IRS. In this case, they may request you sign a form waiving the ten-year limitations period.
  • If your assets are under control or custody of the state or federal court.
  • If there is a lien wrongfully in place.

Get Help with Tax Debt from Optima Tax Relief

Optima Tax Relief can help you deal with the IRS and tax-related issues. If you owe IRS tax debt, our tax attorneys will work to have your tax issues resolved once and for all. For assistance with your taxes, learn more about the services we offer and schedule a free consultation with one of our tax professionals today.

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