When you owe the IRS back taxes, the clock starts ticking. Unfortunately, it is not a short clock. The IRS has some of the strongest collection powers in the country. If you have received one of those white envelopes with the black lettering, your stress levels can spike.
How long does the IRS have to collect back taxes? Here is what you need to know about the countdown and what you can expect while the clock is running.
The IRS Has 10 Years to Collect Back Taxes
In most situations, the IRS has 10 years from the date it assesses the tax to collect the debt. This includes:
- Income tax owed after you file
- Additional tax owed after an audit
- Penalties and interest tied to that tax
- Substituted returns filed by the IRS when someone doesn’t file at all
This period is called the Collection Statute Expiration Date (CSED). After that date, the IRS cannot levy your wages, seize property, or continue collection activity. The debt becomes uncollectible.
But this 10-year timer can pause, extend, or restart depending on the status of your case.
What Stops the 10-Year Collection Clock?
The IRS clock is not just a countdown. Several actions can freeze, extend, or restart those 10 years.
Here are the most common things that pause the CSED:
- Filing for bankruptcy: While a bankruptcy case is open, the IRS must halt collections. The clock stops during your case, plus the IRS adds six months to the countdown.
- Submitting an Offer in Compromise: If you apply for an offer in compromise, the clock stops while they evaluate your application.
- Requesting an installment agreement: Asking for a payment plan can pause the clock while the IRS reviews your request.
- Leaving the country: If you’re outside the U.S. for six months or more, the CSED pauses until you return, and the IRS can resume collection.
- Appealing IRS decisions: Filing specific appeals, like a Collection Due Process appeal, stops the clock while your appeal is underway.
While the IRS has 10 years, that 10 years is not a smooth, predictable countdown. What you do can affect how long the IRS can legally collect.
What Happens During the 10-Year Collection Period?
You might think the IRS will forget about your taxes if you don’t answer the mail. Unfortunately, that will not work. During the collection window, the IRS can use several tools to collect the debt, such as:
- Wage garnishment
- Freezing or levying bank accounts
- Tax-refund offsets
- Liens on your property
- Seizure of assets in more extreme cases
They start with letters, escalate to liens and levies, and continue applying pressure until the debt is resolved.
What Happens When the 10-Year Statute Expires?
Once the Collection Statute Expiration Date passes, the IRS loses its legal authority to collect. That means:
- No more garnishments
- No more levies
- No more collection letters
- No more seizures
- The tax debt is effectively dead
This will not show up on your credit report, and the IRS will not come knocking on your door years down the road.
You need to be careful when you run down the clock. Sometimes, taxpayers think the statute expired because the debt is over 10 years old, but the clock didn’t start when they assumed.
The 10-year period starts when the IRS assesses the tax, not when the tax year ended. For example, if you filed a late return for the 2015 tax year in 2022, the IRS assesses the tax in 2022. That means the 10-year period runs until 2032.
We Handle IRS Collections Every Day
How long does the IRS have to collect back taxes? It is a 10-year timeframe, but your actions can extend that deadline.
If you are dealing with IRS collection letters, levies, garnishments, or you’re trying to figure out your timeline, Easter & DeVore, Attorneys at Law can help. We are here to assist Tennessee taxpayers in protecting their assets, understanding their rights, and resolving back-tax issues with confidence. Schedule a consultation today.
