Tax Relief: Avoid Dragging Out IRS Statute of Limitations
Posted by LWM Team on Fri, May 21, 2010
The IRS
is permitted ten years to bring in a debt.
You must make tax choices that are advantageous as a collection statute is nears expiry. Your options are as follows:
Collection Due Process Appeal
An IRS
Final Notice of Intent to Levy is a collection due process hearing. It lengthens the time period the IRS has to bring in money owed during the time you are awaiting your hearing. To get this benefit, you must reply to a Final Notice of Intent to Levy within the given time. The Collection Statute will not be lengthened if a late-filed collection due process application is distinct as filed in a single year of the time of the Final Notice. It will allow you to a petitions ‘comparable’ hearing. IRC 6330(e), IRM 5.1.9.3.6 and Treas. Reg. 301.6330-1 (g) (3), ex 1 provides legal information.
Innocent Spouse Relief
When the filing of the innocent spouse relief request is filed, collection is delayed until a petitioning period of ninety days to the Tax Court ends. If such a petition is reported for on top of an IRS refusal then the time is lengthened until a verdict from the Tax Court in approximately sixty days. This information is found in IRC 6015(e) and IRM 25.15.1.8
Offer in Compromise
The Statute of Limitations on Collection is lengthened by approximately thirty days when filing an offer in compromise. It can take from six o twelve months for an IRS
examination. You are permitted two years to settle. The proposal for an offer may not be your best option.
Installment Agreements
You may petition if the IRS denies or ends an installment agreement. A petition will lengthen the time of collection. IRC 6331 (k) (2) (d) provides information.
Taxpayer Assistance Order (911)
If the only solution is a Taxpayer Assistance Order to block the IRS
then filing a Form 911 delays the Statute of Limitations on Collection throughout the anticipated evaluation.
Bankruptcy
Bankruptcy lengthens the Statute of Limitations on Collection by an extra six months. It gives the IRS
added time to gather non-discharged taxes if you didn’t get rid of all tax responsibilities. This is explained in IRC 6503 (h) and IRM 5.9.4.2
It is important you ascertain the likelihood for acceptance is more than the threat of lengthening the time for collection because it will only extend your tax troubles.