When Will My IRS Debt Expire?

When Will My IRS Debt Expire?

Yes, it’s true: Just like the cream cheese and mystery sauce in the back of your fridge, your IRS back taxes have an expiration date! The agency can’t come after you forever. If your back taxes are more than a decade old, they’re forced to wipe the slate clean — at least most of the time.

This rule putting limits on the collection period is called the 10-Year Statute of Limitations or Collection Statute Expiration Date (CSED). It’s comforting to know that your debt will disappear one day, and that back taxes aren’t the end of the world.

With that in mind you might be tempted to wait out the IRS until your 10 years are up, but you don’t want to do that without proper guidance for two reasons.

  1. While you wait, your business/family will suffer. The IRS isn’t going to stand back and play nice while you run down the clock. The agency will throw the book at you for those 10 years, likely ramping up their enforcement action as your debt approaches the expiration date.

Those actions have consequences. You don’t want the agency to halt your business operations, seize your bank accounts, or go after your home, so you’ll want to follow best practices to keep the IRS at bay.

  1. The IRS can “stop the clock.” Certain actions you take can trigger an extension to the CSED, pushing it out months or even years and giving the agency more time to collect.

Many taxpayers accidentally take actions that extend the clock. Fortunately, our team at Landmark Tax Group has a full list of these pitfalls, and we can help you avoid them.

We also have additional information about the CSED and the steps you should and shouldn’t take now to address your tax debt — much more than would fit in this article! Head to LandmarkTaxGroup.com/Expire to get the full story. 

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