Waiting out The IRS

There are statute of limitations that tie the hands of the IRS in seeking to assess and collect taxes. For example, the IRS can normally only assess additional tax within three years of the date a return is filed. In addition, the IRS can normally collect taxes for ten years after the taxes were assessed.

There are laws, however, that provide that these time limits may be extended. Many times, taxpayers, through their own seemingly innocent actions, unknowingly extend these time limits. For example, did you know that asking the IRS for an installment agreement allowing the payment of taxes over time, automatically extends the ten year collection period?

Congress has decided that it is unfair to allow the IRS to assess and collect taxes without putting some time constraints on that agency. Regardless, these laws, designed to protect taxpayers, do no good if taxpayers are not aware of them. Before you deal with the IRS, you should seek professional tax advice.

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