The Collection Statute Expiration Date (CSED), commonly referred to as Expiration of Statutes, for IRS taxes is, in most cases, 10 years. Once this Statute period has run, any remaining tax debt is forgiven. The statutory period begins on the date the tax debt is assessed which is usually shortly after a taxpayer’s returns are filed. If a taxpayer never filed their returns the Collection Statute would begin on the date that the IRS creates a Substitute for Return (SFR) for the taxpayer.
In some cases a taxpayer’s debt may not expire exactly 10 years from the date of IRS assessment. There are a number of ways that the IRS Collection Statute can be extended. For example, filing a Bankruptcy or Offer in Compromise will usually extend the amount of time the IRS has to collect a tax debt. Leaving the United States for a period of time or other factors can also extend this Statute of Limitations as well. A tax debt which is assessed as a result of a citizen being convicted of tax fraud will never expire.
When working to resolve an IRS tax debt, the age of the debt and CSED date are very important factors to consider when coming up with a plan of action. If the debt is close to expiring, it is very important that both the taxpayer and any tax professional they are working with are careful not to take any action which will extend the IRS statute further into the future.