IRS Statute of Limitations – What It is!! How to use It!!

IRS Statute of Limitations – What It is!! How to use It!!

by Dave Horwedel, EA

YES! There is an IRS Statute of Limitations. There is a point beyond which IRS can no longer collect on a prior tax debt.

The IRS has ten years to collect on a tax debt after it has been assessed. This date is called the Collection Statute Expiration Date (CSED) — and is 10 years after the debt was assessed.  This deadline can move for a few different reasons.  For example, the submission of an Offer In Compromise, a request for a Collection Due Process Hearing, or IRS Appeals action can extend the Statute of Limitations.

This is something that should be considered in dealing with a long-overdue tax debt. After this time, the IRS can no longer forcibly collect the tax debt. They can’t garnish your wages or file a federal tax lien against you.

Thus, if you have a tax debt that was assessed 9 years six months ago, and the IRS has not been coming after you for it, you might want to just wait six months and let it fall off.

This has happened with my clients a few times. As one example, a taxpayer came in and met with me who had this huge tax debt from an earlier tax year.

I get a Form 2848 IRS Power of Attorney filled out naming myself and one of the other EAs, CPAs, or Tax Attorneys who work with me to represent the client.  (I always try to have a second name on the 2848 so if I am out and the IRS calls, someone else can take the call.)

I pulled the IRS transcripts and discovered the CSED date was a few months away.  We checked back a few months later and it was gone!!! No debt showing!!

So knowing when a debt is falling off is a good idea.  But do not push it too far.

One of my clients (who had a large tax debt before he came to me) waited for a large debt to fall off.  He then tried to wait another year for the next debt to fall off.  Then he got a garnishment order that threatened to wipe him out.

We were able to stave off disaster, but there were certainly a few tense moments there.

Also, as the Statute of Limitations approaches, the IRS can get very active.  I had a former IRS Revenue Officer tell me that an IRS employee can be fired for letting the Statute of Limitations

It is a good idea to contact a CPA, EA, or Tax Attorney (like those at Torchlight Tax) experienced in IRS Representation to investigate this for you. We know what to do.

Once again, if you have tax questions, you can call the IRS.  If serious funds are involved, having a professional contact them would be my recommendation.

You can contact Torchlight Tax at 1-877-758-7797 or  email us at email us at  for a free consultation.

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