IRS STATUTE OF LIMITATIONS

IRS STATUTE OF LIMITATIONS

IRS Statute of Limitations

Owing money to the IRS can be an overwhelming situation. When you file your tax return and a balance results, knowing your options on how to address it is very important. The first thing to know about owing a balance to the IRS is that it has a shelf life, or IRS statute of limitations. Generally speaking, the IRS has 10 years to collect on a balance. This 10 year clock starts ticking on the date your tax return is processed. So, if your 2014 tax return is processed on 04/15/2015, the IRS has until 04/15/2025 to collect on any balances that result.
Taxpayers can have problems with the IRS statute of limitations because they are subject to change and can be extended. Common scenarios for extending IRS statute of limitations involve: filing bankruptcy, filing a claim for innocent spouse, submitting an offer and compromise that is ultimately rejected, examinations of the filed return, etc.

 

How Can Community Tax Help Me?

At Community Tax, the first thing that our tax practitioners do is contact the IRS to get a sense of the balances owed on a taxpayer’s account and we determine the statute of limitations associated with each balance that has been assessed. Our practitioners are able to determine a specific collection expiration date on each balance owed and what many taxpayers do not realize, is that the collection expiration dates can play a significant role in determining how to address a tax balance. For example, if a client has multiple balances that are owed to the IRS, is not missing any tax returns, and they are schedule to expire in 3 months, we would not pursue an offer and compromise (OIC). Submitting an OIC extends collection expiration dates and if a taxpayer has 3 months before balances expire, pursuing a currently not collectible (CNC) status is a much better strategy. Provided a client qualifies for CNC, the client will avoid collection action for 3 months and the balances will expire. The tax practitioners at Community Tax take this approach when assessing every case, regardless of whether a taxpayer qualifies for a payment plan or hardship resolution.

So, there is significant value in hiring a company like Community Tax when you have multiple, outstanding tax balances with the IRS. Our tax practitioners are able to evaluate your account at the beginning of the relationship and develop a personalized, strategic plan for how to address your balances, taking your IRS Statute of Limitations into consideration. Doing so, has the potential of saving a taxpayer thousands of dollars, depending on their situation. Call Community Tax today for more information about how we can help you 1-888-676-4319.

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