Randolph Law Firm, P.C.

Collection actions for unpaid taxes: How far back can the IRS go?

If have gotten behind on your taxes, you are not alone. IRS data for 2015 shows more than 13 million delinquent accounts.

In this post, we'll use a Q & A format to discuss how far back the IRS can go to collect on those accounts.

How far back the IRS can go to collect tax debt?

The general rule is that the IRS has up to 10 years to collect. There is a 10-year statute of limitations period for collections once taxes are assessed. Collections tactics can include tax liens and wage garnishment.

When does the clock start ticking on the limitations period?

The clock starts ticking on the collections period when the taxes are assessed. It can be extended, however, for several reasons.

Reasons why the limitations period can be extended include a bankruptcy filing, living abroad for six months or more, and requesting an installment agreement or offer in compromise. A request for a collection due process hearing also stops the clock.

Is there also a limitations period on how long the IRS has to assess tax?

Yes. The general rule there is that the IRS has three years to assess tax after the due date for a return or the date when it was filed, whichever date was later.

This means the IRS generally has three years to audit you. But if the IRS finds reason to believe you understated your income by more than 25 percent, or engaged in willful evasion, the period can be extended to up to six years.

The IRS may also ask you to voluntarily extend the limitations period while you submit additional information. And finally, there is no limitations period at all on the IRS coming after a taxpayer with allegations of civil tax fraud.

 

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Randolph Law Firm, P.C.
6260 N. Durango Drive
Las Vegas, NV 89149

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