The Internal Revenue Service (IRS) has rules regarding how far back they can go to collect owed taxes, known as the statute of limitations. Understanding these rules is key for managing tax obligations effectively.
The general statute of limitations is 10 years from the date taxes were assessed. As stated on the IRS website, “The IRS generally has 10 years – from the date your tax was assessed – to collect the tax and any associated penalties and interest from you.”
However, some exceptions can extend or pause this timeframe:
- An installment agreement with the IRS can extend the 10-year period.
- If a taxpayer files for bankruptcy, collection activity is stayed.
- If a taxpayer is physically or mentally unable to manage their financial affairs, the 10 years can be suspended.
- If there’s evidence of tax fraud or tax evasion, there is no statute of limitations – the IRS can collect owed taxes indefinitely.
The type of tax also impacts the statute of limitations. For example, the IRS typically has 3 years to collect employment taxes.
In 2024, taxpayers who owe back taxes from 2014 or later may receive collection notices, as the IRS resumes more aggressive collection efforts after pausing some during the pandemic.
If you have questions about statutes of limitations for tax collection, consult a trusted tax professional or the IRS directly. Acting quickly is important, as failure to address IRS collection notices can result in serious consequences like wage garnishment or property liens.