IRS Tax Collection Timeframes in Virginia

When taxpayers owe money to the Internal Revenue Services (IRS), they may think that the IRS will continue to collect unpaid taxes for the rest of their lives. Fortunately, there is a statute of limitations that the IRS must adhere to.

There is a ten-year statute of limitations on unpaid taxes. Essentially, the IRS can only go after the taxpayer within that period of time, then one’s debt is wiped out, barring there are no special circumstances that intervene. Afterward, the IRS will not be able to legally collect any back taxes.

Generally, the IRS will look to intimidate taxpayers into paying as much as possible before the ten-year period arrives by sending notices or warnings.

Dealing with the IRS can be terrifying, especially when a taxpayer is receiving a number of aggressive letters in the mail. By understanding the basic elements of IRS tax collection timeframes in Virginia, one can learn how to approach certain circumstances with confidence.

A knowledgeable tax lawyer could help resolve these matters and provide legal insight on how to proceed appropriately.

Understanding the Statute of Limitations in Virginia

According to Internal Revenue Code Sec. 6502, a limit is placed on how long the IRS can pursue unpaid taxes from an individual. As stated before, the IRS can legally collect for up to ten years before the debt is eliminated. The timeframe begins when the IRS inputs a liability on its books.

The acronym CSED, or Collection Statute Expiration Date, refers to the collection timeframe. Once the CSED draws nearer, the IRS will look to pressure the taxpayers into either extending the timeframe by taking “resolution” offers such as:

  • An offer in compromise
  • Collection due process appeal
  • Innocent spouse claim

Note that filing for any of the options above may result in the extension of the statute of limitations.

How an Offer in Compromise Can Affect the CSED

Filing an offer in compromise will likely extend the statute of limitations on collection. Taxpayers that normally file for an offer in compromise will wait anywhere from six to twelve months for the initial investigation to finish.

If the initial investigation yields a rejection, an appeal can be made by the taxpayer to review one’s situation yet again, thus forcing the individual to wait for another six to nine months, possibly longer.

Time should always be factored in one’s decision to file for an offer in compromise. Although the collection timeframe is only paused during the investigation process, the time it takes to pay remains relevant.

How Collection Due Process Appeal Can Affect the Timeframe

In many cases, the IRS cannot enforce action to seize any property such as bank accounts or personal property until notices are sent to the taxpayer. Collection due process rights allow the taxpayer to participate in an appeals hearing to explore alternatives to levy or seizure, which places the statute of limitations on hold.

Only timely-filed collection due process appeals will extend the statute of limitations on tax debt collections, meaning the appeal must be filed within thirty days after a Final Notice of Intent to Levy for the clock to keep ticking.

Pursuing Options for Virginia Taxpayers

Understanding the various circumstances surrounding IRS tax collection timeframes in Virginia can be confusing at first, but with the help of an attorney, legal insight can be obtained to ensure that the taxpayer is making the right moves and put an end to debt once and for all. Call today.