How Long Can the IRS Try to Collect a Debt?
Dealing with the Internal Revenue Service (IRS) can be a daunting experience, especially when it comes to handling tax debts. One common question that arises is: how long can the IRS try to collect a debt? Understanding the timeline and the options available to taxpayers can help alleviate some of the stress and confusion surrounding this issue.
The Statute of Limitations
The IRS has a limited amount of time to collect a tax debt, which is governed by the statute of limitations. Generally, the IRS has 10 years from the date the tax debt was assessed to collect the debt. This timeline can be extended under certain circumstances, such as when the taxpayer is outside the United States or when the IRS has filed a Notice of Federal Tax Lien.
Exceptions to the Statute of Limitations
While the 10-year statute of limitations is the general rule, there are exceptions that can extend the collection period. For example, if the IRS has filed a Notice of Federal Tax Lien, the collection period can be extended indefinitely until the lien is released or satisfied. Additionally, if the taxpayer is under a legally enforceable agreement to pay the debt, the collection period can also be extended.
Options for Taxpayers
If a taxpayer is facing an IRS debt, there are several options available to manage the situation. One option is to enter into an installment agreement, which allows the taxpayer to pay the debt in monthly installments over a set period of time. Another option is an offer in compromise, which allows the taxpayer to settle the debt for less than the full amount owed.
Discharging Tax Debt in Bankruptcy
In some cases, a taxpayer may be able to discharge tax debt through bankruptcy. However, there are strict requirements that must be met, such as the debt being at least three years old and the taxpayer having filed a tax return for the debt at least two years prior to filing for bankruptcy.
Conclusion
Understanding how long the IRS can try to collect a debt is crucial for taxpayers facing tax liabilities. By knowing the statute of limitations and the available options, taxpayers can take proactive steps to manage their tax debt and minimize the stress and financial burden associated with it. It is always advisable to consult with a tax professional or an attorney to ensure the best course of action is taken in each individual situation.
