IRS Law Blog

The IRS loves to send letters telling you how much you owe, that they want to levy your wages, and demanding that you immediately contact them.

It can seem like the IRS letter onslaught will last forever and follow you for the rest of your life.

If only you could go to your mailbox without the fear and anxiety of having another IRS letter drop on you.

But it does come to an end.

The IRS are limited by law on how long they can write to you and try to collect.

Specifically, Internal Revenue Code 6502, “Collection After Assessment,” limits the IRS to 10 years to collect a tax debt.  The 10 years starts at the debt of “assessment,” which is when the IRS places your tax debt in their records.  This is normally right after you file your tax return, and normally ends 10 years after.

But after 10 years of receiving IRS bills, they will not write to you and let you know when the collection expires.  You may eventually notice that it has been a while since you received an IRS letter, and that’s about the only indication the IRS will give you when the 10 years expires.  You will be left with silence from the IRS, and wondering why.

Tax liens become invalid.

Getting confirmation from the IRS takes on greater importance because tax liens end after 10 years, too, at the same time the collection expires.  That means you could be unaware that IRS tax liens on your property are no longer valid as they do not directly notify you.

Yes, another frustration of dealing with the IRS – but hopefully the last one.

You don’t have to be in the dark.

The good news is that you do not have to be in the dark about where you stand with the IRS.  They will disclose written records verifying that you no longer owe them, that the collection time has expired, your balances are zero, and that your tax liens are unenforceable.

These records are called IRS account transcripts, and will have IRS entries confirming the date your 10 year collection statute expired. Your IRS account transcript will also contain record of all IRS activity against you, including:

• When your tax returns were filed, and how much you owed.
• The date the 10 year collection period started.
• If the 10 years has ended, an IRS entry verifying your debt has been cleared to zero.
• Any actions that would have tolled the 10 years, such as the filing of an offer in compromise.
• The amount of interest and penalties that the IRS charged against you.
• If you were ever audited and the amount you owed as a result.
• If you had an installment agreement and every payment made while you were in it.
• If the IRS had placed your account in currently not collectible status and if it ever reverted back to active collection status.
• The filing date of any offer in compromise, along with the IRS decision date of acceptance or rejection.
• Filing date of tax liens.
• The date the IRS sent you a Final Notice of Intent to Levy, which would have allowed them to levy your property.

If the collection statute date has expired, your IRS account transcript will give you the peace of mind that your IRS debt is permanently behind you.  When the collection date expires, the IRS computer is programmed to give you a credit for the amount of taxes that can no longer be collected.  This includes interest and penalties; it all goes away.

If you still do owe the IRS, they will make available the date when the collection expires so you can plan accordingly with account records to verify your history and that their date calculations are accurate.

Your balance is now ZERO.

With the credit in place, your balance is automatically reduced to zero.  The account transcript will show, in writing, both the credit to your account, and that your IRS debt is now zero.  The IRS is no longer able to levy your wages, accounts, and property, and their tax liens are unenforceable.

There is no limit on the amount of the credit the IRS will give you when the collection expiration date expires. Whether you owe the IRS $25,000 or $250,000, the credit will reduce your balance to zero.

Sometimes, no news from the IRS can be good news, but not when you want to move on with life and put your tax debt and tax lien behind you.  Fortunately, IRS account records are available to get the access you need to learn about your IRS debt and confirm if your IRS balance is at $0.00.