The IRS generally has strict statutes of limitations for assessment (usually three years from filing) and collection (generally 10 years from assessment). Still, certain events can toll (pause) or extend those timeframes.
The Basics: Assessment vs. Collection
An “assessment period” and “collection period” aren’t the same thing, but they often get mixed up:
- Assessment Period: Normally, the IRS has three years from the date you file your return to assess additional tax.
- Collection Period: Once tax is assessed, the IRS has 10 years to collect it.
These timelines may sound reassuring, but various events can stop the clock and give the IRS more time.
When the IRS Clock Pauses or Resets
Let’s go through the most common situations when the statute of limitations can be paused or extended.
- Offer in Compromise (OIC): If you submit an OIC, the IRS pauses the collection statute while they review it, and for 30 days after a rejection, plus any appeal time.
- Installment Agreement Requests: Submitting a payment plan request can pause the collection clock while the IRS considers it, and during any appeal if it’s denied.
- Bankruptcy: While you’re in bankruptcy, the collection statute is suspended, and it stays paused for six months after your case ends.
- Collection Due Process (CDP) Hearings: If you request a CDP hearing after getting a lien or levy notice, the clock stops until the case (and any appeals) are fully resolved.
- Innocent Spouse Relief: Filing for relief pauses the statute while the IRS reviews your request.
- Living Abroad: If you’re outside the U.S. for 6 consecutive months or more, the IRS can suspend the statute until you return.
- Fraud, False Returns, or No Filing: For assessment periods, the IRS has no time limit if they can prove fraud, a false return, or that no return was filed.
If you think you’re “waiting out” the IRS, you may actually be giving them more time to act. The safest move is to speak with an experienced tax attorney who can calculate your real statute dates, anticipate tolling events, and protect your assets.
At Gabaie & Associates, LLC, we’ve assisted Maryland taxpayers in Baltimore, Columbia, Frederick, Rockville, and throughout the state with complex IRS matters. If you’re worried about deadlines, liens, or levies, don’t wait—the IRS isn’t. Call today at (410) 358-1500 or fill out our contact form for a consultation.
