IRS Statute of Limitations on Back Taxes

Are you getting ready to pay the IRS for back taxesand if you owe money with your tax return but do not
that are owed or has the IRS been chasing after youpay, then the IRS will automatically make a tax
for money? Before you pay the IRS you must readassessment against you.
the rest of this article for important information that theIn the alternative if you never file your tax return, then
IRS will not tell you.the IRS may prepare a return on your behalf based
Did you know that the IRS only has 10 years to collectupon the limited information that they have on record.
money from you and after 10 years they are foreverThey will then make a tax assessment against you.
barred from collecting from you? If you are like 99.99%Finally, if your tax return is selected for an audit and
of people you never knew this simple fact becausethe IRS determines that you owe more money, then
the IRS collection agents will never tell you thisthey will make an assessment against you.
information. If you send them a check after the tenSo with the Statute of Limitations it is very important to
years, the IRS will gladly take your money and you willdetermine on what date the notice of assessment
be none the wiser.started, because this starts the clock running with the
So here are the facts. If you owe the IRS money then10 years.
they are limited by law on how long that they canFurthermore you may have already extended the
attempt to collect this money from you. This is knownstatute of limitations on the collection period without
as the Statute of Limitations.even knowing it. If you had entered into an installment
The most important item is when does the clock startagreement with the IRS, then this installment
ticking on this ten year period? According to theagreement stops the clock from running. If you default
Internal Revenue Code, the ten years start when theon your installment agreement then the clock starts
tax liability is assessed by the IRS. This can be eitherrunning again.
when the tax return is filed or when the IRS issues aDealing with the IRS can be very difficult and costly if
notice of deficiency. To further complicate the matteryou do not have the proper advice and guidance. If the
if an extension was filed then this extension can affectIRS is trying to collect money from you, then before
when the ten year period starts.you pay them one dime see if the statute of limitations
An assessment is a simply a recording of the tax debthas expired otherwise you could be throwing your
on the books of the IRS. When you file your tax returnmoney down the toilet.