Is There A Time Limit on Tax Liability?
IRS debt is like no other debt; the IRS has unique collection remedies, and asset protection strategies that work against civil judgments provide no barrier against the IRS. Clients occasionally asks whether there is any point after which the IRS cannot prosecute a collection action to recover past due taxes. There is a ten year statute of limitations against collections by the IRS. This means that in 2004, the IRS can take action collect taxes due or assessed within the past ten years. There are many other rules which could extend the IRS's reach. For examples, delays in assessment of taxes, extensions granted to the taxpayer, an agreed installment payment plan, and other types of IRS procedures can make the statute of limitations effectively longer than ten years. A taxpayer owing back taxes can ask the IRS to provide a tax transcript which provides a comprehensive history of tax payments and liability
