Statute of Limitations
What Is a Statute Of Limitations?
A statute of limitations is the time period established by law for the IRS to assess, review and resolve any tax related issue. Once the time period passes, the IRS is no longer able to allow a claim for refund by a taxpayer. Or assess additional taxes or take collection action.
There are three different types of statutes of limitation:
The Refund Statute
This statute applies to your tax return and how long you have to claim a refund. You are able to claim a refund for a filed return within three years. It is from the date the return was due or two years after you’ve paid the tax.
The Assessment Statute
This statute applies to how long the IRS is able to audit or charge you additional taxes. It applies on any tax return year. This is typically three years from the date in which the return was due or two years from when you paid the tax
The Collection Statute
This applies to how long the IRS is able to collect any outstanding tax balance that you owe. This statute is the longest of the three. The IRS has 10 years from the date which they assessed the tax to collect on it.
Are There Any Circumstances Where The Statute Of Limitation Does Not Apply?
Why Do I Need To Know About The Statute Of Limitation? Does It Really Help Me?
The statute of limitation may not seem too important. Especially in regard to the collection statute as 10 years may seem like a long time. But the statute of limitation comes in handy for many scenarios. For example, the collection statute applies to many IRS debt relief options such as:
When it comes to the statute of limitation, there are number of benefits to discussing your situation with a professional. In the case of your tax refund, a tax professional may be able to look back on previous tax returns. They can provide you with a refund or a large sum of money from your tax refund for previous years. That is even before you meet the statute of limitation for those tax returns. It is also helpful to speak to a professional if you are in any tax debt to see if you have hit the statute of limitation for any outstanding debts. Call us today to discuss your tax situation and see what we can do to help you. See our full list of IRS tax resolution services.