If you owe money to the IRS, the good news is it can’t collect from you forever. As a general rule, the IRS has ten years from the assessment date to collect unpaid taxes. Once the ten-year period is over, the IRS must stop its collection efforts.
So, if you can wait it out, you'll be off the hook for the money you owe.
When Does the Statute of Limitations Start to Run on IRS Collections?
The ten-year statute of limitations to collect unpaid taxes starts to run from the date the tax is first assessed. (I.R.C. § 6502 (2024).) For tax returns, this is usually the date you file your return and an amount is due but not paid.
If you file your return before it's due, it will be considered filed on the due date. If you have an extension to file, then the filing date will be the date the IRS receives your return. If your return is filed late, it will be considered filed on the date the IRS receives it or the date you mail it, depending on the method of mailing.
If you fail to file a tax return that's due, the statute of limitations never starts to run. So, most tax practitioners recommend filing a return, even if you owe money and can’t pay. In some cases, the IRS will do an estimated return for you, which will start the statute of limitations for the estimated tax liability.
Tolling Events Temporarily Suspend the Statute of Limitations
While the IRS has ten years to collect unpaid taxes, certain events “toll” or temporarily suspend the statute of limitations.
One of the most common tolling events occurs when a taxpayer applies to the IRS for an offer in compromise. During the time the IRS reviews the application, the statute of limitations for collecting the debt is tolled—regardless of whether the offer is ultimately accepted or rejected. Because an IRS review can take anywhere from six to 18 months, taxpayers should take this into consideration when deciding whether to apply for an offer in compromise, especially if their ten-year statute of limitations period is coming to an end. If you request an installment agreement, the statute of limitations is similarly tolled while the IRS considers the request.
Filing a collection due process request also tolls the statute of limitations, as does bankruptcy from the date the case is filed until six months after the date of discharge. For taxpayers serving in a military-related combat zone, the statute of limitations is tolled during their entire length of service plus 180 days.
IRS Judgment Extends Collection Period
While the IRS generally has ten years to collect from you, a mechanism exists for extending the ten-year period. The IRS can file a lawsuit against you to collect the unpaid taxes. If they win, they can collect on the debt for as long as the judgment against you is valid. This period is in addition to the ten years the IRS has to collect from you.
Talk to a Tax Pro
If you need tax help, talk to a tax professional, such as a certified public accountant or a tax attorney. A tax professional can prepare tax returns, give tax information and guidance, as well as provide representation before the IRS.