Can the IRS collect after 10 years? Generally, no. But there are exceptions you need to know.
The IRS is a beast. With virtually unlimited power and resources, it’s one of the most dreaded government agencies for people who owe tax debt.
But imagine saying to the IRS,
Sorry, you’re too late!
Sounds good, right?
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Even though the IRS is powerful, there are limits.
And that brings up an important question:
How many years can the IRS go back for unfiled or unpaid taxes?
There’s a statute of limitations that cuts off their power. If you know when that kicks in, you could head off tax trouble.
Surely, they can’t go back 10 years or more.
Or can they?
Can The IRS Go Back More Than 10 Years?
Like most IRS rules, figuring out how far back the IRS can go isn’t straightforward. Yet, it’s something you need to know if you owe tax debt or have unfiled taxes.
After all, you don’t want the IRS to make a surprise visit.
How long they have depends on two factors:
- When (and if) you filed your taxes
- If you do something to pause the statute of limitations
We’ll talk about pausing the collection period in a minute.
For now, I want to focus on one question:
Can the IRS collect after 10 years?
Well, yes and no.
Generally, the statute of limitations says the IRS can only collect taxes for 10 years.
“After the statute expires, the IRS can no longer collect on the debt,” according to Canopy Tax.
IRS Communication Mistakes:
The IRS might not be aggressive at first. But if you ignore their letters and requests, you could face tax liens and levies that take the cash in your bank account, your house, and more. Work with a tax relief expert to avoid federal tax liens and bank levies.
But there’s a catch.
The IRS can collect after 10 years in certain circumstances.
I’m not sure why you would, but the period can be longer if you agree to extend it.
Some installment agreements can require you to waive the 10-year limitation, too.
That’s why it pays to work with a tax professional. A tax expert will know what to look for and can warn you if the IRS is asking you to give up legal rights.
Does The IRS Forgive Tax Debt After 10 Years?
The IRS has a debt forgiveness program. It’s called Offer in Compromise, and it’s tough to qualify.
If the IRS accepts your offer, you could be off the hook for all or part of your tax debt.
If you don’t qualify, you might wonder:
Does IRS forgive tax debt after 10 years?
Unfortunately, there isn’t a straight answer.
The IRS can get pretty aggressive, so it’s best to settle your debt quickly.
You could try to “wait out” the IRS.
If you go this route, know that it’s rarely effective.
“The only circumstance in which this might (possibly) work is if the taxpayer has no assets, wages, or property that the IRS can go after for the entire length of the 10 years,” said Canopy Tax.
Get a free second opinion!
IRS 10 Year Statute Of Limitations
What is the statute of limitations? Basically, it’s a law that says a taxpayer isn’t liable for their tax debt forever.
It puts a limit on how long the IRS can try to collect your back taxes.
But here’s the thing.
There are some situations where the 10 years can be paused.
I can hear you now…
The IRS lifts 10 year statute of limitations?
They sure can.
The IRS answers less than 50% of the telephone calls it receives. Having a tax professional on your side can help you get through to the IRS and settle your tax debt.
It’s called “tolling the statute of limitations,” and it can happen if you:
- File bankruptcy
- File an appeal
- Request an offer in compromise
- Ask for an installment agreement
- Leave the U.S. for 6 months or more
- Go on active military duty
What If You Don't File Taxes For 10 Years?
Taxes are a drag.
I get it.
If you have unfiled tax returns but haven’t heard from the IRS, you might think you’re free and clear.
That’s just not true.
Eventually, the IRS will put your name at the top of their list. And it won’t be pretty.
There are limits on how long the IRS can collect.
The clock doesn’t start ticking until you file your tax return.
IRS Writes Off Millions Yearly
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If you remember nothing else from this article, please remember this:
The statute of limitations never starts if you don’t file your taxes.
That means you could have the IRS hanging over your head forever!
And no one wants that.
If you’re behind on tax returns, file your missing returns immediately. If you don’t know what years you’re missing or need help to get your tax documents together, contact a tax relief company for expert help.
Your Next Steps
Because the IRS has so much power, waiting out the statute of limitations isn’t the best option for dealing with tax debt.
Ten years might not seem like that much time, but the agency will only get more aggressive in their collection efforts as time goes on.
Have a tax lien on your house? The IRS can grant a tax lien release so you can sell your home or apply for a home equity loan to help you pay your tax debt. But first, talk to a tax debt professional about ways to reduce the amount you owe.
And you could jeopardize your home, car, paycheck, retirement account, and anything else you might have that’s worth anything.
So what’s next?
Your first step is to get up to date on your tax returns if you aren’t already.
If you have questions or aren’t sure where to start, get a free, confidential consultation.
Taxes are incredibly complex. Innocent mistakes can lead to disastrous consequences.
A tax pro can explain your options and help to get the IRS off your back as quickly as possible.
Get a free second opinion!
By Amy Beardsley
Amy is a personal finance expert and freelance writer and owner of Early Morning Money, She has bachelor degrees in business administration and legal studies, and her work has been featured on The Huffington Post, Money Tips, and many other personal finance publications.