© by Robert G. Nath, Esq.

1. What is the “statute of limitations” on collecting taxes?
   
   Normally, it’s ten years from date of assessment. Many people believe there is no limit on the IRS’ authority to collect. Others will answer, “three years,” or “five years,” or “seven years.” The correct answer is “ten years.” That time starts running when the IRS “assesses” the tax, that is, when it officially records your tax liability on its computers and sends you a bill. When you file your tax return, you are “assessed.” In most cases, you have paid in full already through withholding, or you send in more money with the return. So it’s not an issue, normally. But if you have a “balance due” return, the IRS will assess the tax, and penalties, and interest. It then gets ten years to collect.
   

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2. What is the “three year” period of limitations?
   
   The IRS has three years to “assess” a tax against you. Assessing a tax means billing you for it and demanding payment. You can extend this period in a number of ways. The IRS can also extend it under certain circumstances.
   

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3. How is the collection period of limitations extended?
   
   You can extend it, or the IRS can extend it.
   
   You extend it by these means (the most common): a voluntary waiver (usually, Form 900), filing an offer in compromise, request for installment agreement, collection due process hearing request, innocent spouse request, application for taxpayer assistance order, petition in bankruptcy or other proceeding where your assets come under court control, and going outside the US for 6 months.
   
   The IRS can extend the statute by requesting the Department of Justice to file suit against you to obtain a judgment for the taxes (the statute is suspended when a timely suit is filed).

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Robert G. Nath has focused on IRS matters for over 30 years. He holds degrees from Yale, the University of Pennsylvania, and Georgetown University. After clerking for a federal judge, Mr. Nath litigated tax cases for 8 years with the Tax Division, U.S. Department of Justice. Since 1984, he has been in private practice, representing individuals, entities, accountants and attorneys before the IRS and in court in tax collection, audit and tax litigation matters. Mr. Nath's book, "The Unofficial Guide to Dealing with the IRS" (Macmillan), was first published in 1997. He has been quoted in national media on tax procedure matters and has also appeared on radio and television programs. He has been an editor of professional journals and his articles have appeared in law reviews and other legal periodicals. Mr. Nath is a former U.S. Army Reserve Green Beret officer.
Note: Mr. Nath’s cases normally involved total tax liabilities of $100,000 or more.
Click here to contact Robert G. Nath.

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