When the IRS assesses a tax debt against you, it also issues a Collection Statute Expiration Date (CSED). It's important to know how a CSED works, when it can be modified, and what it means for your tax debts. You'll especially want to know how it affects you if you're planning to apply for a partial payment installment agreement (PPIA).
What Is the Collection Statute Expiration Date (CSED)?
The CSED is the final date the IRS has to collect on a tax debt. Generally, the IRS sets a collection period of 10 years, starting from the date of the tax assessment. The types of assessments that can come with a CSED include:
- Tax assessments from voluntarily filed returns
- Tax assessments from amended return filings
- Audits
- Civil penalties
- Substitute for return tax
If you qualify for a PPIA, you can pay a manageable monthly amount to the IRS until the debt is paid or until the CSED passes. Any remaining balance after the collection date is forgiven.
Generally, the IRS will aggressively pursue collection from you. It has several means of getting the money from you, such as seizing assets or garnishing wages, so it's usually not recommended to just wait out the 10 years for the tax debt to go away.
The CSED Can Change
Although the CSED is typically set for 10 years, certain circumstances can extend this collection period. Certain events can prevent the IRS from collecting tax; if this happens, the collection period is suspended. The time the IRS has to collect then gets pushed out by however long the suspension was. The IRS can also extend the CSED collection period if it gets special authorization to do so.
Managing the CSED with Professional Tax Help
You want to pay off your tax debts as efficiently as possible. To do so, you need to be aware of your CSED and how it works: whether it can be extended or when the IRS is allowed to collect. The tax attorneys at Gabaie & Associates, LLC can help you navigate complex IRS processes and ensure you remain compliant with all tax debts you owe to the IRS. Call us today at (410
