As a general rule, there is a ten-year statute of limitations on IRS tax collection. According to this, the IRS can attempt to collect taxes for up to ten years from the date they were assessed. Once the ten years are up, the taxes are canceled and you no longer owe the debt so the IRS stops its collection efforts.
However, sometimes the statute may be extended. For example, if a taxpayer withholds taxes through fraud, the statute may not apply. This means that the IRS could still collect the taxpayer’s payment beyond the 10-year term.
In the same way, the statute can also be tolled by certain events, such as:
- Bankruptcy proceedings.
- Submission of a collection due process request (CDP).
- A taxpayer applies to the IRS for an offer in compromise or an installment agreement.
- A taxpayer is currently living outside the U.S.