The Collection Statute Expiration Date (CSED) marks the end of the collection period, the time period established by law when the IRS can collect taxes. The CSED is normally 10 years from the date of the assessment.

Is It Possible For The IRS To Forgive Tax Debt After 10 Years?

Yes, it is possible! Once your tax debt reaches the 10-year mark, the IRS effectively ceases all collection efforts. However, 10 years doesn’t always imply ten consecutive years. Your debt age is always calculated based on the date of assessment. Any qualifying event that suspends your CSED can extend the life of your debt.

How Long Does The IRS Have To Collect Back Taxes?

The IRS generally has 10 years to collect tax debts. However, a number of factors can extend the collection period on your tax debt situation. Here’s a list of circumstances that almost always extend CSED on tax debt:

• Bankruptcy
• Living abroad for six months
• Military deferment
• A Collection Due Process (CDP) hearing
• A taxpayer assistance order
• Installment agreement
• Innocent spouse relief
• Offer in Compromise (OIC)

In exceptional circumstances, the IRS may sue a taxpayer. Your statute of limitations will be suspended in this case. It’s also important to understand that if tax fraud is proven, your debt may never be forgiven. The bottom line is that CSED is a factor that could be used in a tax-resolution strategy. However, it is only part of an effective strategy when the right conditions and tax law knowledge are present.

CSED Overview

If you can’t pay your taxes, the most important action you must take is to get into an agreement with the IRS. The IRS Fresh Start Program consists of 4 main programs that are accessible to taxpayers who owe much more than they can reasonably afford to pay. The four major programs are as follows:

• Currently Not Collectible (CNC)
• Offer In Compromise (OIC)
• Installment Agreement (IA)
• Penalty Abatement (PA)

These relief programs allow qualified taxpayers the option to reduce or even eliminate their tax debts. These tax experts will help you qualify for the program and help you figure out which options will give you the most suitable outcome.