Does anyone have knowledge on how the IRS cancels taxes that have been owed for many years. I have had clients that have had balances due just erased after 10 years and some that don't. What is the criteria? Also, I'm in California which doesn't exactly follow suit but now I have a client that now has a zero balance with the state after owing taxes and not paying for about 15 years.
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TTB, page 15-3.
"After assessment of tax, a levy must be made or court proceeding begun within 10 years after the date of assessment..."
Tax has to be assessed before the 10-year statute starts running. -
The IRS statute of limitations, known as the CSED, ( collection statute expiration date) is 10 years after the most recent assessment. However, there can be extensions of this if the clock was stopped for any reason.
Some of things that will stop the clock are bankruptcy, pending OIC, litigation, military deferment, CDP appeal and a TAO.
This limitation can also be waived for up to 5 years. This is usually done to set up an installment agreement.
If no return has been filed, there is no limitation.
California until two years ago had no statute of limitations, but now it is 20 years.Comment
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