If you owe a tax debt, the IRS will work with you to help you settle it. Let’s face it, they want their money. Some people, however, have gotten rid of their debt thanks to an IRS statute of limitations. There’s only so much time during which the IRS can seek debt payment on back taxes, thanks to the IRS statute of limitations.

Beginning from the initial tax assessment, there is a 10-year statute of limitations on tax debt. Once that 10 years has passed, the debt is free and clear. That person no longer owes.

What about Statute of Limitations Extensions?

What should be 10 years, however, can be extended out to a longer period of time. The statute of limitations can be extended for the following reasons:

  • If you request innocent spouse relief or are making installment arrangement payments, the statute will be placed on hold until the IRS can make a final decision.
  • If, for at least six months, you leave the country, until you decide to return, the statute is placed on hold.
  • Should you file bankruptcy, the statute of limitations is on hold until: 1) court proceedings have been concluded and 2) six months following the bankruptcy.
  • Should you agree to an extension, until that extension time is up, the statute is placed on hold.

But… The statute of limitations does not apply, and the IRS can go back as far as it wishes, in the case of tax evasion or civil tax fraud. Before they can pursue you, they must have you agree to any payment installment or extensions and they will want you to sign a waiver. Take a good look at what you’re signing, however! Before you sign on that dotted line, you may wish to seek professional assistance.

A Tax Break for Everybody

Taxpayers deserve a break, there can be no doubt about it. And that is why the statute of limitations was created. It allows everyone the opportunity to be free and clear from debt involving taxes. But will it apply to your current situation and benefit you? Before you agree to an installment plan and sign any documents, the best and smartest thing to do is to consult a tax debt relief service.

At Tax Defense Partners, we have helped thousands of clients throughout the United States. If you owe back taxes, interest, or tax penalties, we can help you save money. We assist with transcript analysis, statute of expiration collection, penalty abatement, audit representation, offer in compromise, and much, much more. Our clients receive full representation and the assistance of seasoned, dedicated, reputable professionals.

If you would like to receive a free consultation and discover what Tax Defense Partners can do for you, contact us today. Do your best not to put this off until a later date. The IRS will only wait so long for applying even more penalties and fines.