Collections Statute Expiration

Get relief from IRS collection action with the help of the experienced attorneys at Carr Law of Arizona. Our team can assist with collections statute expiration and provide highly effective tax solutions to help you get back on track. Contact us to learn more and schedule a consultation.
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Collections Statute Expiration

The IRS Collections Statute Expiration is the time period during which the Internal Revenue Service (IRS) is authorized to collect unpaid taxes from a taxpayer. This time period is governed by the IRS Collection Statute Expiration Date (CSED), which is set by federal law. The CSED generally begins on the date that the tax liability is assessed by the IRS and ends 10 years from that date. The IRS rule code for the Collections Statute Expiration is found in 26 U.S. Code § 6502

The IRS has a process in place for determining when the CSED has expired for a particular taxpayer. This process involves reviewing the taxpayer's case file and identifying the date that the tax liability was assessed. The IRS will then calculate the CSED by adding 10 years to the assessment date. If the current date is beyond the CSED, the IRS will generally no longer have the legal authority to collect the unpaid taxes from the taxpayer.

Collections Statute Expiration: What You Need to Know

As a taxpayer, it's important to be aware of the collections statute expiration (CSE) and how it can affect your tax situation. In this article, we'll discuss what CSE is, how it works, and what you can do if you're facing collection action from the IRS.

What is Collections Statute Expiration (CSE)?

CSE is the date by which the IRS must collect taxes owed from a taxpayer. The collections statute is set forth in Internal Revenue Code (IRC) Section 6502, which provides that the IRS has 10 years from the date of assessment to collect the taxes owed. This means that once the 10-year period has expired, the IRS can no longer pursue collection action against the taxpayer.

However, it's important to note that CSE does not mean that the tax debt goes away. The taxpayer still owes the tax debt, and interest and penalties may continue to accrue. Additionally, the IRS may still file a tax lien against the taxpayer's property to secure the debt, but they cannot take any collection action against the taxpayer personally.

How does Collections Statute Expiration work?

The collections statute begins on the date of assessment, which is typically the date the tax return is filed or the date the IRS audits the taxpayer and assesses additional taxes owed. The 10-year period begins from that date, and the IRS has until the end of the 10-year period to collect the taxes owed.

If the taxpayer files for bankruptcy or enters into an offer in compromise (OIC) with the IRS, the collections statute may be suspended during that time period. The collections statute may also be extended if the taxpayer signs a waiver extending the statute of limitations.

What can you do if you're facing collection action from the IRS?

If you're facing collection action from the IRS, it's important to take action to resolve your tax debt. Here are some options that you may consider: Installment Agreement:

  1. An installment agreement allows you to make monthly payments to the IRS until the tax debt is paid in full. This can be a good option if you cannot afford to pay the tax debt in full.
  2. Offer in Compromise: An OIC is an agreement between the taxpayer and the IRS to settle the tax debt for less than the full amount owed. This can be a good option if you cannot afford to pay the full amount owed and have exceptional circumstances.
  3. Currently Not Collectible: If you cannot afford to pay the tax debt and do not have any assets that the IRS can seize, you may be able to qualify for currently not collectible status. This means that the IRS will not pursue collection action against you until your financial situation improves.
  4. Litigation: If you believe that the IRS has made an error in assessing your tax debt or if you have a legitimate dispute with the IRS, you may consider litigation. This can be a complex and time-consuming process, but it may be necessary if you believe that your rights have been violated.

How can the Carr Law Firm help?

The Carr Law Firm is a tax resolution firm located in Arizona, Maricopa County in the Phoenix Metro Area. With over 25 years of legal experience, Founding Attorney Nathan E. Carr has a Master Degree in Taxation and has helped many clients resolve their tax debts.

The Carr Law Firm can help you with the following services:

  1. Tax Debt Resolution: The Carr Law Firm can help you negotiate with the IRS to resolve your tax debt through an installment agreement, OIC, or currently not collectible status.
  2. Tax Liens and Levies: The Carr Law Firm can help you prevent or release tax liens or levies against your property.
  3. Audit Representation: The CarrLaw Firm can represent you during an IRS audit and help you navigate the process.
  4. Penalty Abatement: The Carr Law Firm can help you reduce or eliminate penalties assessed by the IRS.
  5. Litigation: The Carr Law Firm has experience representing clients in tax litigation cases and can help you protect your rights in court.

If you're facing collection action from the IRS, it's important to take action to resolve your tax debt. The Carr Law Firm can help you explore your options and find a solution that works for you.

Conclusion

Collections statute expiration is an important concept for taxpayers to understand. While it can provide some relief from IRS collection action, it does not eliminate the underlying tax debt. If you're facing collection action from the IRS, it's important to take action to resolve your tax debt. The Carr Law Firm can help you explore your options and find a solution that works for you. Contact us today for a free consultation to learn more about how we can help with your tax resolution needs.

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Get Help:

  • Contact the Carr Law Firm for a free consultation to learn more about how we can help with your tax resolution needs.
  • Educate yourself on the options available for resolving your tax debt, such as installment agreements, OICs, and currently not collectible status.
  • Keep track of important dates related to your tax debt, including the date of assessment and the collections statute expiration date.

 

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