How Long Does the IRS or State Have To Collect Delinquent Tax Debt

Statute Of Limitations

For tax resolution purposes, Statute of Limitations is a term meaning the time the IRS and/or states are legally allowed to collect on delinquent tax debt. For the most part, individual states follow the same logic as the IRS, but one primary difference between them is the number of years allowed to collect the debt. We will reference the IRS in this article.  If you need information about a specific state, please contact us using the contact information at the end of this article.



The IRS has 10 years to collect the delinquent tax debt from the date the tax debt was assessed. It is very important that you know when your collection time has started. The clock starts ticking the day a tax debt liability is finalized. This is determined by the date:

• You filed your tax return and it was processed or
• If the IRS assesses any additional taxes or
• If the IRS files a Substitute for Return on your behalf 

Exceptions

There can be exceptions to the time frame for the Statute of Limitations. When the IRS suspends collection efforts, they are allowed to extend the collection time by the same amount of time that the collections were suspended.

Some of the main exceptions to the 10 year rule are:

• If the IRS is considering your request for an Installment Agreement or Offer-In-Compromise. If your request is rejected, the IRS will suspend collection for an additional 30 days. Also, the IRS will suspend collection during any period of time the Appeals Office is considering your appeal request. 
• If you are outside the U.S for at least six consecutive months. 
• If the tax periods during which the IRS is attempting to collect are included in a bankruptcy with an automatic stay. In this instance, the IRS will suspend collection for that time period. An automatic stay prohibits the IRS from continuing with collection activities. 
• If you request a Collection Due Process Hearing.  In this instance, collection will be suspended from the date of your hearing request until a Notice of Determination is issued or until the Tax Court makes a final decision. 
• If the IRS allows you time to compile paperwork, etc. 

For the exceptions listed above, the IRS is, by law, allowed to extend these days onto the collection period thereby extending your Statute of Limitations past the 10 years.

More Information About Tax Resolution

Tax resolution is not rocket science, but it does have many terms, laws, and concepts that are foreign to the average taxpayer. This article explains the time the IRS is legally allowed to collect on delinquent tax debts, and, in the process, the article introduced other tax resolution terms and concepts, such as collection due process hearing, appeals request, substitute for return, etc. For a simple, yet complete, understanding of tax resolution and how you can achieve tax resolution for the least dollar amount possible, we encourage you to visit www.TheTaxSettlementGroup.com or call us at 877-801-9166 for more information.