Statutory Limits on IRS​ ​Collection2018-06-16T05:05:51+00:00

Statutory Limits on IRS Collection Activities

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The IRS only has 10 years to collect any tax debt you may owe. The clock starts ticking once the first tax notice goes out, regardless of whether you receive or respond to it. Once a decade has passed, the outstanding debt may possibly be forgiven if all attempts to collect have failed.

Before you get too excited however, remember that the IRS has many ways and means to recoup what’s owed. Wage garnishments, liens and levies, and asset seizures are some of the powerful tools at their disposal. The IRS use these collection tools sooner than the 10-year mark if you ignore notices or do not attempt tax resolution.

Under certain circumstances, the IRS is also to extend the statute and pursue collection for longer than a decade. Don’t try to beat the clock. Seeking tax resolution is always your best option.

Frequently Asked Tax Resolution Questions (FAQ’s)

What is a tax lien vs. a tax levy? Can the IRS use either of them to seize my property?2017-09-04T17:44:26+00:00

When the IRS issues a tax lien, it makes a formal claim to your property but allows you to keep it while the matter is under consideration and you make payment arrangements.

A tax levy is more serious, and yes – the government can and will seize your assets to satisfy tax debt if you are not actively working with them to resolve the issue. Finding a payment agreement you can afford is much better than letting the situation go until a prized asset is seized. Once the IRS issues a tax levy against your home, business, or other assets, finding a means for settling the tax bill is essentially the only way to get your money and property released.

Depending on the size of your tax debt, the IRS can claim both current assets and those you will earn or acquire in the future.

What can I do if the IRS has already frozen my bank account due to my tax debt?2017-09-04T17:42:38+00:00

If the IRS has already taken action against one or more of your accounts, it’s important to understand that the levies will not be removed until you begin working with the IRS to resolve your tax debt. Enrolling in an installment plan agreement or simply paying the taxes owed is the quickest way to get the levy on your account released. You may also provide proof of financial hardship if you cannot currently pay anything towards your tax debt.


Because banks are required to hold levied funds for 21 days before turning them over to the IRS, acting quickly to get some form of tax resolution plan in place will help your bank speed the process of getting your funds returned to you. Our tax experts are skilled in negotiating the kind of tax resolution plan designed to satisfy IRS requirements and put your money back where it belongs – under your control.

What kinds of installment agreements are available with the IRS?2017-09-04T17:40:21+00:00

Setting up an installment agreement is probably the simplest way to manage your tax debt and get it paid off. The IRS offers several different types of agreements to fit taxpayer needs, and payments can run up to 10 years. Taxpayers who owe less than $25,000 may qualify for a streamlined installment agreement, in which you pay down the debt over a five-year period. If you owe less than $50,000, the Fresh Start Initiative allows you to extend payments to six years. Partial and full-payment plans are also available to taxpayers who do not qualify for other programs and are based on a financial statement and information submitted by the taxpayer.

Will the IRS come after my children or their income if I pass away with tax debt?2017-09-04T17:31:53+00:00

The IRS can legally collect any back taxes you owe from your bank accounts, assets and other parts of your estate if you die. They will generally do so before the proceeds of an estate are distributed among surviving children, but the debt cannot be passed on to your children otherwise.

How long is the IRS allowed to pursue tax debt collection under law?2017-09-04T17:35:07+00:00

For every tax debt, there is a Collection Statute Expiration Date. The CDED determines the amount of time the IRS can continue to pursue payment for taxes owed in previous years. The statute states that the IRS cannot pursue collection on a tax debt for longer than 10​ ​years​ ​from the original tax assessment date, which corresponds with the month, year, and date the return was filed.

The IRS can change this date, but only under certain conditions. If you file an appeal or make an offer-in-compromise, the deadline may be extended.

Can you do anything about my tax penalties?2018-06-16T05:06:14+00:00

We have been very successful in getting IRS tax penalties waived or reduced for our clients, including penalties for failure to file, late filing, and underpayment of taxes due. If this is the first time you’re filing a late return, or if you were previously in good standing and have been on time with your returns for the last three years, the IRS may offer you a penalty abatement.

You may also appeal your penalties by petitioning for abatement due to reasonable cause, meaning unforeseen circumstances significant enough they prevented you from filing or paying your taxes on time. Some examples include a medical emergency, temporary disability, ​extreme​ ​financial​ ​hardship, or natural disaster. Tax fraud carried out in your name by a CPA or tax preparation service may also be eligible grounds for an appeal.

Even if you don’t qualify for these specific types of waivers, our tax abatement experts will work with you to get your penalties reduced or eliminated. We want to ensure that you do not see your tax debt rise each month due to compounding interest and penalties on overdue tax payments.

What if I can’t afford the monthly payments the IRS requests to resolve my tax debt?2017-09-04T17:21:55+00:00

If your financial situation has changed since your last tax return, or you can’t get on an installment plan because the amount the IRS requests is too high, there are a few other options. You can submit an up-to-date financial statement demonstrating any current hardship and detailing wages earned and expected from work or other income for the year ahead. If you can demonstrate that your income is insufficient for the IRS to collect all of what you owe within the time period they have to collect, you may be able to get penalties and interest reduced, or part of your tax debt canceled.

How many notices will the IRS send before my bank account is levied or a lien is put on my property?2017-09-04T17:20:20+00:00

There is no set number of notices that applies to every taxpayer’s situation, but it’s never a good idea to ignore correspondence from the IRS. If you’ve received two or more notices about delinquent tax returns or seeking payment of taxes owed – or have gotten even one certified letter from the IRS about your situation – you may be closer to a tax lien, tax levy, or wage garnishment situation than you realize. Immediate action may be required to prevent bank account or asset seizure.

Can the IRS pursue collection if I’m a senior citizen or live on a fixed income?2017-09-04T17:19:19+00:00

Absolutely. Your Social Security payments can be garnished just like your wages can. It’s even easier actually, because there’s no middleman — the government will just takes their portion right off the top before sending you what’s left in your social security check.

Can the IRS garnish wages from my paycheck? What if I’m self-employed?2017-09-04T17:13:29+00:00

If you owe back taxes and do not cooperate with IRS attempts to collect, wage garnishment is an effective tool that forces you to pay up. Each time you fail to respond to a letter requesting payment, you’re taking another step towards wage garnishment. And once the IRS issues a wage garnishment order to your employer, he or she will have no choice but to comply.

Self-employed taxpayers are not immune to wage garnishment either. The IRS will simply issue the order to the businesses that pay you contract or freelance wages.

Do you offer a free consultation?2017-09-04T16:20:44+00:00

Yes, we offer a free consultation. Keep in mind a consultation is the assess your current situation and agree upon a fee arrangement. We may not be able to give you a legal opinion until more research is done given your situation. Sometimes it may be necessary to charge a research fee or analysis fee to give you a complete plan of action and legal opinion. We strive to keep this fee as reasonable as possible.

How much do your tax resolution services cost?2017-09-04T16:21:35+00:00

We provide the initial consultation free of charge, so we can learn about any tax issues you may have and design a tax resolution plan to meet your needs. We offer many services for a flat fee, and also give you the option of paying over time. We’ll do our best to work with you regardless of your financial situation.