IRS Tax Collection Timeframes in Maryland

If a person owes a federal tax obligation that remains unpaid, the Internal Revenue Service (IRS) is likely to take action against them sooner or later in an attempt to collect its money. Collections action could take the form of garnishment of a person’s wages, usage of the individual’s current tax refunds to offset their tax debt, and even the placement of a lien or levy on their property. While the property could include their home, bank accounts, business, and vehicles, there are IRS tax collection timeframes in Maryland that the IRS must follow.

Once the time limit, or the statute of limitations, has expired, the IRS normally must cease collections of the unpaid taxes. After a certain time period, a person’s federal tax could go away if the IRS has been unable to collect it by then. Reach out to a seasoned tax attorney to learn more about IRS tax collection timeframes.

Defining the Statute of Limitations

Most legal actions are subject to a statute of limitations, which is a deadline by which a lawsuit is required to be filed or some other sort of legal action is required to be taken. If the individuals or government entities fail to take legal action as required by that deadline, they may risk an inability to take any action at all.

For the purposes of collecting unpaid taxes, the federal government in the form of the Internal Revenue Service (IRS) may be unable to collect past-due taxes after the statute of limitations has expired. After this 10-year person has passed, the IRS generally must cease all collections efforts to recover the unpaid tax. Individuals are recommended to contact a knowledgeable attorney to learn how the statute of limitations may impact their case.

Deadlines for IRS Collection of Unpaid Taxes

Pursuant to 26 U.S.C. §6502, the IRS generally must collect unpaid taxes by levy (seizing taxpayer property to satisfy the debt) or by court proceedings within ten years of the date that the tax was assessed. Exceptions could include:

  • If the IRS and taxpayers have entered into an installment agreement, the IRS must take action to collect the unpaid taxes prior to 90 days after the expiration of any period for collection agreed upon by the parties at the time that they entered into the installment agreement.
  • If the IRS releases a levy pursuant to § 6343 after the 10-year period, the IRS must take action to collect the unpaid taxes prior to the expiration of any period that parties agreed upon in writing prior to the levy release

If the IRS commences a court proceeding to collect unpaid taxes during the statute of limitations period, the timeframes for IRS tax collection in Maryland via levy could also be extended until the tax liability is satisfied or becomes unenforceable.

Exceptions to the IRS Tax Collections Statute of Limitations

There are typically exceptions to every rule. This could include the statute of limitations during which the IRS must collect unpaid taxes. There are certain actions by taxpayers that may toll the 10-year statute of limitations or stop it from running. See Internal Revenue Manual § (06/01/07). Effectively, these actions could give the IRS longer than 10 years to collect individuals’ unpaid tax debt. When a taxpayer files for bankruptcy, the statute of limitations “clock” stops running. The statute of limitations will not begin running again until six months following the end of the taxpayer’s bankruptcy proceedings.

Similarly, if taxpayers submit Offer in Compromise proposals to the IRS, file certain appeals relating to IRS tax collections, or apply for innocent spouse relief, the 10-year statute of limitations is “paused” and does not resume until the pending request is resolved. A Maryland attorney experienced with IRS tax collection timeframes could explain further explain the potential exceptions to tax collection.

Engage the Services of a Maryland Tax Collections Attorney

While there is a general 10-year statute of limitations for IRS tax collections, there also are exceptions to that rule that may extend that timeframe in your particular case. To calculate the IRS tax collection timeframes in Maryland, contact a skilled Maryland tax collections lawyer to assist you with your tax debt case.