Sam Brotman, JD, LLM, MBA September 30, 2013 4 min read

How Long Does the IRS Have to Collect on an IRS Balance Due?

The IRS cannot chase you forever and, due to the 1998 IRS Reform and Restructuring act, taxpayers have a little relief from the IRS collections division's pursuit of an IRS balance due. Generally, under IRC § 6502, the IRS will have ten years to collect a liability from the date of assessment. After this ten-year period or statute of limitations has expired, the IRS can no longer try and collect on an IRS balance due. However, there are several things to note about this ten-year rule. First and foremost, the statute is carefully crafted to read: ten years from the date of assessment. The assessment date is April 15th of the year that the taxes were due or the date the return was actually filed, whichever occurs later. This means several things. First, there’s no way to reduce the IRS’s statute of limitations by filing your return before April 15th. Second, there’s a pretty severe penalty for late filing in that the ten-year period does not kick in until you actually file your return. Failing to file a return or attempting to hide from the IRS does not relieve you from liability. Next, the assessment date can change if you file an amended return or if the IRS has filed a substitute return on your behalf and you file a return to correct it. In addition, if you tried to conceal income or have filed a fraudulent income tax return, the statute of limitations does not apply on trying to collect on an IRS balance due.

In addition, you should be aware that this ten-year statute for collection on an IRS balance due can be extended in certain instances. For example, bankruptcy, requesting a Collection Due Process hearing, applying for an Offer in Compromise, extended periods of time out of the United States, requesting a Taxpayer Assistance Order from the Taxpayer Advocate, or litigation proceedings with the IRS can prolong the statue of limitations. Also, if the collections statute is close to expiring, the IRS can also sue you in Federal Court to obtain a judgment against you, which has its own expiration limits. Generally, this is considered a pretty extreme action and the IRS usually does not waste the time or the resources to sue taxpayers in federal court unless the liability is several million dollars.

Need help with your IRS balance due? Please visit any of the following for more information.

Tax resolution services for small businesses and mid-size businesses (business tax resolution)

Tax resolution services for self-employed individuals and independent contractors (individual tax resolution)

Tax resolution services for individuals and families (individual tax resolution- W2 and wage earners)

Legal representation before IRS collections

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Sam Brotman, JD, LLM, MBA

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