Generally, there is a 10 year statute of limitations on the IRS collection process. But as you know like everything there are exceptions.


So the question is what is the date of the assessment?

The date of the assessment is the time which IRS receives your tax return and officially puts it on the IRS computer system.

A computer staff person of the Internal Revenue Service places your account with all important data on the IRS system, thus begins the date of the assessment.

Generally the time is approximately 4 to 6 weeks after a tax return is filed.

If you do not file a tax return the 10 year period does not run.

It is important to remember that it has nothing to do with the tax year involve, it all as determined on the date of the assessment


The 10 year statute of limitation can be extended due  to various reasons.


The ten-year collection period can end up lasting more than ten years because it can be suspended.

What causes the 10 year statute of limitation to be extended??

The general rule is that if IRS is barred by any action the 10 year period of time is suspended by the Internal Revenue Service.

This means that the limitations period is suspended if you file for bankruptcy and the bankruptcy court issues an automatic stay preventing the IRS from taking collection action against the taxpayer, the suspension lasts for the period of the bankruptcy case plus six months.

The period is also suspended while the IRS is considering your request for an installment agreement, offer in compromise, or request for innocent spouse relief, or while you live outside the U.S. continuously for at least six months.

The IRS can also extend the ten-year period by suing you in federal court, however, it rarely does this.


Voluntarily Extending the Limitations Period

The ten-year limitations period is not absolute.

It can be extended if you voluntarily agree to do so.

The IRS uses form 900 and may ask the taxpayer to extend the statute of limitations on a collection case. Many times they use this as leverage against the taxpayer because the IRS feels they can possibly collect the debt  somewhere in the future but not at the current time.

Many times a revenue officer may seek to extend the statute of limitations and a taxpayer will tell the agent to go take a hike, this may not be a good idea because the IRS and the revenue officer can start to take immediate collection action.

You should speak to a tax professional that the IRS ever ask you to sign a 900 waiver to extend the statute of limitations.


Payment Agreements, Monthly Payment plans, Cautions

However, if you enter into an installment agreement with the IRS allowing for partial payment of the amount due, you may be likely ask have to sign a form waiving the ten-year limitations period.

But this extension can be no more than six years.

If your limitations period is nearing its end and you still owe the IRS substantial money, IRS personnel may offer you an installment agreement with attractive terms in order to get you to agree to extend the collection deadline.

Consider carefully before agreeing to any such extension. It’s always best to ask a true tax professional who knows the system before signing any waiver or extension statute

Many times it better off refusing to extend the deadline and let the IRS collect whatever it can before it runs out.

Many times good tax planning can avoid the IRS getting into your pocket at the last minute.


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Mr. Michael D. Sullivan

Michael D. Sullivan is the founder of MD Sullivan Tax Group. He had a distinguished career with the Internal Revenue Service for 10 years. As a veteran IRS Revenue Officer / Agent, he served as an Offer in Compromise Tax Specialist and Large Dollar Case Specialist.

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