The IRS Statute of Limitations on Collections

If you owe money to the government, you need to know that the IRS has 10 years to collect.

The IRS has 10 years from the date tax was assessed to collect a tax debt. That is all, just 10 years - full stop.

In most cases, after 10 years the debt becomes unenforceable and is no longer collectible.

For example, if your 2014 tax return were filed on November 1, 2015, and the tax was assessed on November 5, 2015, the IRS would have until November 4, 2025, to collect that tax.

The reason the statute of limitations is so important is that we, as tax resolution experts, use the amount of time remaining on a client's collection statute to determine which solution we will use to resolve a client’s tax liability.

The other key point about the statute of limitations is that certain actions will toll (stop) the statute, preventing it from running. Actions that toll the statute include:

  • Filing of an Offer-in-Compromise,

  • Filing a Collections Due Process request,

  • Requesting an installment agreement, and

  • Filing for bankruptcy (also adds 6 months to the statute).

These items listed above prevent the IRS from taking collection action, and therefore stop the 10-year collection statute from running. The way the government looks at it is - it would be unfair to allow the statute to continue to run while the government can not take collection actions.

In this article, I have discussed the IRS's statute of limitations on collections and how the statute is tolled or stopped when certain actions are taken.

If you have tax debt, I encourage you to contact us today to schedule a free consultation where we can discuss how the statute on collections might affect you. This discussion is 100% free, and you will be under absolutely zero pressure to retain us. There is no risk and you have nothing to lose. The worst-case scenario is that you spend an hour of your time with us and leave the conversation with clarity and insight into a very complex tax issue. To schedule your consultation, please click here.

Stephen J. Hardy, Enrolled Agent, MBA

Founder, Resolution Tax Services