IRS Collection Statute of Limitations

If you are wondering if the IRS has an unlimited amount of time to collect back taxes, the answer is no. The IRS has until 10 years after the date the tax is assessed(usually when the return in filed, or an audit is completed) to collect the tax owed. If the taxes are not paid within that time frame(with some exceptions) then the taxes are written off.

Exceptions that can extend the statues are:

• Filing bankruptcy- extends through the bankruptcy process and for 6 months after the bankruptcy is discharged.
  
• Filing and Offer in Compromise and for 30 days after rejection.
• While an Appeal is pending.
• When the IRS requests taxpayer to sign a waiver to extend the statue to prevent certain types of enforced collection when a statue is about to expire.

Be aware that the closer you get to a statute expiration date, the more aggressive the IRS will become in its attempt to collect back taxes. Your best bet to avoid coming close to the statute by setting up a payment plan.
However, if you are in a financial situation where you cannot make a payment, then the possibility exists that the statute could expire during the time in which you are in a Non Collectible Status. In that case, you will not have to pay the taxes due.

If you need assistance in handling your tax debt contact an Enrolled Agent or other tax professional.