Things to Know about IRS Statute of Limitations on Collections and Assessments

Dealing with an IRS officer is not easy. Especially if one is doing all the paperwork without the help of any tax law firm Virginia Beach, if you have received an IRS notice, you must be aware of the Collection Statute Expiration Date.

A Collection Statute Expiration Date has been established by the IRS. The CSED is ten years long in terms of logistics. On the other hand, the IRS can apply for several exemptions and extensions to prolong the CSED. The ten-year norm is not without exceptions. 

In this blog, we have answered some commonly asked questions about CSED.

What is CSED?

The IRS has ten years from the date of the assessment to collect back taxes. In cases where you’ve filed a tax return, the date is generally the date of your tax return. If you neglected to file a tax return, the IRS would issue a notice, and the clock will begin ticking down then.

The IRS has ten years to recover unpaid taxes from the date of the evaluation. The date is usually your tax return date in situations when you’ve filed one. If you don’t submit a tax return, the IRS will send you a notification.

In general, the IRS is given three years from the date of filing to assess the tax. FURTHERMORE, the IRS has six years to evaluate your tax liability if you omit things or forget to report certain information.

If any of the following are true, the IRS has an infinite time to evaluate a tax. You:

  • skipped filing a return
  • submit a fraudulent return
  • Deliberate tax avoidance

The IRS has ten years to commence the collection procedure from the date of the evaluation. In general, the IRS will undertake its most active efforts to collect unpaid taxes soon before the CSED. Since delinquent tax returns can put you under the radar of the IRS, you should consult IRS Lawyer Virginia Beach to avoid complications with the IRS. 

What happens if a person doesn’t file a tax return?

If you didn’t submit a tax return, the IRS has the authority to start the evaluation procedure whenever they want. They will have an unlimited amount of time to do this. They’ll eventually submit a Substitute for Return (SFR) assessing your taxable income for the year or periods you didn’t file. The statute of limitations will then begin once the SFR has initiated the assessment process. 

What can suspend the IRS Statute of Limitations?

In some situations, the IRS has the legal authority to extend the statute of limitations. This implies they can change the date on which the statute of limitations starts to run. This buys them additional time and allows the CSED to be extended. 

Bankruptcy is one of the situations that can suspend the statute of limitation.

Suppose you declare insolvency and the court orders a stay of your lenders’ actions. In that case, the statute of limitations is postponed for the duration of the bankruptcy, and an additional six months is added.

Things to Know about IRS Statute of Limitations on Collections and Assessments
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