Wage Garnishment

 

Statute of Limitations -The IRS generally has 3 years, from the date a return is filed, to Audit that return.  The IRS has 10 years from the date of assessment (usually close to the filing date) to collect all taxes, penalties and interest from the taxpayer. The taxpayer does not owe the IRS anything after the 10-year date has passed. Together, these laws are called the statute of limitations. They put time limits on various tax-related actions that you and the IRS can take.

 

As with all IRS rules, there are exceptions to this rule. Examples include:

  • Fraud. If the IRS alleges fraud or criminal activity, the statute is open indefinitely. The IRS can go back as far as they like in this case.

  • If the taxpayer agrees in writing to allow the IRS more time to collect the tax by signing a waiver.

  • If the taxpayer files bankruptcy during the 10 year period.

  • If the taxpayer files an offer in compromise during the 10 year period.

  • If the taxpayer files an application for taxpayer assistance order (Form 911-ATAO) during the 10 year period.

  • If the taxpayer timely files a Request for a collection due process hearing (Form 12153-CDP) during the 10 year period.

 

In all of these situations the period for the IRS to collect is extended for a specific time, beyond the 10 years.