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Statute of Limitations

The IRS has different time limitations for assessing tax, collecting tax and issuing refunds.  In assessment cases, the statute runs for three years after the later of (1) the filing date of a return or (2) the original due date of the return.

Tax Tip – In cases involving a substantial omission of income, the IRS is given an extended period to assess deficiencies.   There is no statute of limitations in cases involving fraud or where no return is filed.

In collection cases, the IRS generally has 10 years after the date of assessment to collect the unsatisfied taxes, though if the IRS obtains a court judgment, it can collect after that period.

running out of time for statute of limitation
Tax Tip – The 10 year period may be suspended or extended in certain instances, for example, when the IRS and taxpayer enter into a payment agreement.

For tax refund claims, the taxpayer must amend the return within three years from the time the original return was filed, or two years from the time the tax was paid, whichever is later.