If you owe back taxes to the IRS, it's important to understand how long they have to collect the debt. The timeline varies depending on several factors, including the type of tax owed and whether or not you've made any payments. In this guide, we'll break down the collection timeline and provide tips on how to resolve the issue.
The Statute of Limitations for Collecting Back Taxes.
The statute of limitations for the IRS to collect back taxes is generally 10 years from the date the tax was assessed. However, there are several factors that can extend or pause the collection timeline, such as filing for bankruptcy or entering into an installment agreement with the IRS. It's important to understand your options for resolving back taxes and to seek professional help if needed.
Exceptions to the Statute of Limitations.
While the general statute of limitations for the IRS to collect back taxes is 10 years, there are several exceptions that can extend or pause the timeline. For example, if you file for bankruptcy, the collection timeline is paused until the bankruptcy case is resolved. Additionally, if you leave the country for an extended period of time, the collection timeline may be extended. It's important to understand these exceptions and how they may impact your situation. Seeking professional help from a tax attorney or accountant can also be beneficial in navigating the complexities of resolving back taxes.
How the IRS Collects Back Taxes.
The IRS has several methods for collecting back taxes, including wage garnishment, bank levies, and property seizures. They may also file a federal tax lien against your property, which can negatively impact your credit score and make it difficult to sell or refinance your assets. It's important to address back taxes as soon as possible to avoid these consequences and work towards a resolution with the IRS. Seeking professional help can also be beneficial in negotiating a payment plan or settlement.
Options for Resolving Back Taxes.
If you owe back taxes to the IRS, there are several options available to resolve the issue. One option is to set up a payment plan, which allows you to pay off your debt over time in manageable installments. Another option is to negotiate an Offer in Compromise, which allows you to settle your debt for less than the full amount owed. You may also be eligible for Currently Not Collectible status, which temporarily suspends collection efforts if you are experiencing financial hardship. Seeking professional help from a tax attorney or enrolled agent can also be beneficial in navigating these options and negotiating with the IRS.
Seeking Professional Help.
If you are struggling to resolve your back taxes with the IRS, seeking professional help from a tax attorney or CPA can be a wise decision. These professionals have the knowledge and experience to navigate the complex tax laws and negotiate with the IRS on your behalf. They can also help you explore all of your options for resolving your tax debt and choose the best course of action for your specific situation. While hiring a professional may come with a cost, it can ultimately save you time, money, and stress in the long run.