IRS Statute of Limitations and how you can Benefit from It.
The Statute of Limitations – What are the Rules and How Do They Work?
The statute of limitations provided by the IRS is one method some individuals use to resolve back taxes; however, it is the one method that they keep hushed about. When the IRS sends you an initial assessment of back taxes notice, the IRS then has a maximum of ten years from that date to collect the taxes owed.
Do not go for this method if you have just recently been assessed because it can mean many years of IRS-related misery as they attempt to collect owed taxes. If an individual has been under the classification of “currently not collectible” for a long while, they can reach a point at which the statute has expired.
This statute also comes into effect if the IRS fails to review your taxes within a period of three years after a tax return is filed. The only way, in this situation, where the statute would not apply is if you filed a tax return that was fraudulent, whereby you understated your taxes by a minimum of twenty-five percent.
It is a very rare occurrence that an IRS agent forgets the limitation statute. However, errors can be made, and in these cases, the taxpayer will get away without having to pay a penny of the owed tax amount.
However, the most common regulation is the ten-year rule from the date of assessment. If this cut-off date approaches, the IRS may try to make last minute efforts to reset the statute by making you undertake a certain action.
How Can the IRS Extend the Statute of Limitations?
These are some of the most common ways to extend the statute, but there are also other methods the IRS can employ. To learn more, it is advisable to speak directly with a tax specialist. They are especially helpful in situations where you believe you have exceeded the statute but the IRS is attempting to take action.