Is There A Statute Of Limitations on Tax Debt?

People often question if there will come a point when after a period of collecting tax debts, the IRS can no longer claim the amount you owe them. Is there such a thing as statute of limitations n IRS tax debts? Yes, there is.. The law says that the IRS can only go after you in a span of 10 years. After that time, your debts are considered non-existent, and your IRS problems, solved.

The strategy of not settling your taxes and outwitting the IRS for ten years may seem simple, but it is not. Everyone who has tried running away from their tax debts will testify that the government will be increasingly rigorous in their collection methods. Besides this, a tax lien may also be imposed on your credit record and will remain in effect until the 10-year period has expired. The tax lien in your credit score significantly lowers the latter and will keep you from getting any loan no matter what you are trying to purchase. These pieces of information clearly indicate the need for us to avoid a tax lien at any cost.

The best recourse then involves you working with the IRS so they will not resort to such extreme and rigorous measures. The 10-year period in itself is already a very long time and aside from this, certain actions may extend the statute of limitations period. For instance, applying for an Offer in Compromise, or an OIC, takes about a year to be processed for approval or denial. In essence, your tax debt is essentially frozen at the time of the proceedings. If, unfortunately, your OIC is denied, the 10-year period resumes from the point when the decision was arrived at. In effect, another year was added to your 10-year period.

Filing for a bankruptcy also influences the statute of limitations period. Since the IRS can't enforce any collection strategy against you while your bankruptcy is in process, again the statute of limitations is essentially frozen and resumes once your bankruptcy is either dismissed or discharged. This again, will also affect the length of the statute of limitations on your tax debt.

Many will see this situation as discouraging and that none of this is good information. But if you are positive about it, you will realize that the IRS can't run after you for unpaid taxes forever. The fact that certain measures are available to lessen the severity of any IRS problem also makes matters lighter. Again, the need to get professional assistance on this matter should not be underestimated. After all, handling the IRS is among the tasks that obviously requires the help of tax professionals.

Darrin T. Mish is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. His passion is providing IRS help to taxpayers with both individual and payroll tax problems. He teaches attorneys, CPAs and Enrolled Agents in the finer aspects of IRS representation all around the United States. He can be reached at his website at http://www.getIRShelp.com

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