IRS Collection Statutes: Exceptions to the infamous "10 Year" Rule

Free at Last: Ten long years have passed since the IRS first discovered your Tax Debt. Somehow, you've made it this far without being levied, bullied, and laid to rest. But now the IRS can't collect from you anymore! Right?

Actually, They can.

Contrary to popular belief, the IRS can continue to collect after ten years have elapsed on your tax debt.

It Starts: The IRS ten-year statute of limitations period starts when the IRS officially determines you owe the debt. After ten years, your IRS case is closed and it becomes illegal for them to contact you regarding the debt. But there are several ways the Statue of limitations can be extended.

The following will extend the Statute of Limitations on your Tax Debt:

-Filing An Offer in Compromise

-Being in litigation with the IRS

-Request a Collection Due Process Hearing

But wait, there's more:

-Federal Lawsuit: If the IRS sues you the statutes can be extended

-Signing a Waiver: Signing a waiver might be required for things like setting up an Installment Agreement with the IRS.

The general rule of thumb is this, any action that puts your IRS Case on hold will extend the statutes. Otherwise, the IRS is losing years to collect their money.

And don't forget about Bankruptcy:

-Ch.7 Bankruptcy: this will extend the statues by 1 year on average

-Ch. 13 Bankruptcy: this will extend the statute of limitations by 5 years plus another 6 months for good measure!

Post Expiration: The IRS has been known to call individuals after their Statute of Limitations have expired. Most of the time, the taxpayer doesn't even know the statutes have expired! If you know you've been paying on your debt for years, double check to make sure you're not paying what you don't have to.