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The statute of limitations for tax collections

Tax law can be complicated. This is often why individuals in New York and elsewhere rely on the assistance of tax professionals or tax programs to file their taxes. While individuals and businesses have a set duration to file taxes each year, the IRS is bound by different requirements. This means that they have much more time to assess a filing and determine whether or not errors were made. And if it is determined that there is a past due balance, the IRS is bound by a set of rules.

When it comes to the time that the IRS is given to examine one's tax return, many believe that the statute of limitations is only three years. This is generally true when it comes to making an assessment of the tax; however, when there is a past due amount owed by the taxpayer, the IRS actually has 10 years from the date of the assessment of tax to be collected.

It is important to be knowledgeable of the time remaining of this 10 year collection period, as it helps one determine the solutions they might have the resolve the past due amount. For example, if most of the 10 year period is remaining, then the likely solution is to file a compromise or request an installment plan. This could help stop the running of interests and penalties; however, it will stop the statute of limitations and extend the period of time the IRS has to collect the tax.

In contrast, if little time of the 10 year period is left, it might be possible to deem the outstanding liability non-collectible. This could allow for the statue of limitations to run out while also keeping the IRS from instilling an enforcement action

Tax collection matters are not easy to deal with. It can be a very stressful situation, causing some to not understand that they have options to help alleviate some or all of this issue. In these matters, it is not only vital to fully understand the issues at hand but also explore what options one might have to resolve these issues. While the collection process may not be stopped, an agreement could be reached in effort to make the matter more manageable.

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White Plains Office
81 Main Street
Suite 307
White Plains, New York 10601

Phone: 914-686-7171
Fax: 914-686-0168
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East Hampton Office
17 Beverly Road
Post Office Box 2888
East Hampton, New York 11937

Phone: 631-329-7171
Fax: 631-604-6140
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726 King Street
Post Office Box 488
Chappaqua, New York 10514

Phone: 914-238-7171
Fax: 914-238-4353
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