IRS Tax Debt: How Many Years Does It Take the IRS to Forgive Tax Debt?

Many American Taxpayers may wonder if the Internal Revenue Service (IRS) can forgive an outstanding tax debt after failing to collect it over a certain number of years.

The answer is yes although the majority of taxpayers are not aware that the IRS has created a law that requires them to write off debts after a certain period of time.

How many years does it take for the IRS to be forgiven of tax debt?

The IRS has 10 years to collect an unpaid tax debt under the 10-year statute of limitations. If they fail to do so in a decade, they have to write off the debt.

However, taxpayers who choose to wait for the IRS to collect their debts should be aware that IRS agents can become more aggressive in their collection methods over the years.

“The Collection Act Expiration Date (CSED) indicates the end of the collection period, which is the period of time specified by law when the IRS can collect taxes,” reads the government’s official website.

CSED is usually ten years from the date of evaluation.

“Assessments with their CSED include, but are not limited to, original tax assessments from voluntarily filed returns, tax assessments arising from amended return filings, replacement tax return (SFR) assessments filed by the IRS when an individual fails to file a return, and audit assessments. and some punishment assessments.”

IRS agents can either offer you an installment payment plan or even ask you if you’d like to extend CSED. You should not make any decisions before consulting a tax professional. Meanwhile, it’s worth noting that the time the IRS can collect debts can be suspended or extended.

“The 10-year initial CSED may be postponed due to certain events,” the website reads.

The collection period run is generally suspended when the IRS is prohibited from collecting taxes.

“The time the IRS can collect is pushed out by the period in which it is suspended. In other words, the initial ten-year limit for collection is no longer than the original ten years. The IRS generally takes no tax action during the time the collection period is suspended, but there are some Exceptions.

“By contrast, a collection period is extended when the IRS is legally authorized to add a certain amount of time to the first 10 years to collect. The IRS is not blocked or stopped from collecting when a collection period is extended.”

.

(Visited 21 times, 1 visits today)

Related posts