Taxes. No one likes having to file taxes. If you are among the million other Americans who don’t only have to file taxes but also have to pay additional taxes each year, you really do not like taxes. When you get hit with a hefty tax bill you are likely unable to pay all of it right away. Most Americans cannot. This then leads to the question of how long do you have to pay the taxes you owe and will you owe this tax debt forever. With the 2017 tax season having come to an end earlier this week, I am sure many Americans are asking this very question right now.
Fortunately, against common belief, there is actually a statute of limitations on IRS debt. A statute of limitations is a state or federal law that sets a specific time limit on how long an entity or individual can try to collect a debt from you. The statute of limitations for the collection of IRS debt is ten years. As with most things, there are some exceptions to this rule.
The statute of limitations begins to run when the tax is assessed. Taxes are assessed when an IRS official signs a form that states how much you owe in taxes. This occurs after you file your taxes, but fail to pay the full amount owed. The date on this form signed by the IRS official is the official date from which the ten-year statute of limitations period will begin to run.
However, there are some circumstances in which this statute of limitations might last longer than ten years. For example, the statute of limitations pauses when you file bankruptcy and will remain paused for another 6 months after your bankruptcy case has been concluded. The statute of limitations also pauses, or tolls, when the IRS reviews a possible settlement option you submitted, or if the IRS files a lawsuit against you. When the statute of limitations tolls, the IRS is not able to try to collect from you. The statute of limitations is then extended by the amount of time they were unable to move forward with any collection efforts.
You should also be weary of installment agreements you enter into with the IRS. Often, such an installment agreement includes a waiver of the ten-year statute of limitations.
If the IRS filed a lien against you or your property, you will be happy to know that the lien also expires with the ten-year statute of limitations.
While having an IRS debt can be very taxing and it might be very tempting to try to hide under a rock until the statute of limitations has expired, that is not always the best option. By doing nothing, you could potentially be putting yourself in a worst situation. Knowing your options is always the best option when dealing with any type of debt. Those with IRS debt, likely have other types of debts as well. Consulting with an experienced debt collection attorney can help you understand all of your options. Contact the Law Office of David M. Goldman, PLLC today.