How Long Does the IRS Have to Collect Money? [Video]

The IRS can’t come after a taxpayer for unpaid taxes forever. Once a tax deficiency has been assessed, the IRS has ten years from the date of the assessment to collect the tax, penalties, and/or interest per Section 6502 of the tax code. This time period is called the Collection Statute Expiration Date (CSED) and it can be extended if the taxpayer agrees to an installment agreement or if the IRS successfully obtains a court order.

The CSED may also be suspended (paused) if the taxpayer:
-Files for bankruptcy
-Files a request for innocent spouse relief
-Submits an offer in compromise
-Requests a collection due process hearing
-Enters a combat zone
-Lives outside the U.S. continuously for a period of six months or more

What if the taxpayer doesn’t file a tax return? In that case, the IRS will file a tax return for the taxpayer (this is called a Substitute for Return) and assess the tax, at which point the CSED begins.
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