Tuesday, September 1, 2020

The IRS Statute of Limitations


When it comes to dealing with the IRS, you don’t just have an indefinite amount of time to do things. Instead, the IRS typically sets deadlines and statutes of limitations that impact how much time you have before an option runs out. The IRS even sets some limitations on itself. Read on to learn about a few such rules and regulations and how they might affect you.   


Getting a Return

As you might have guessed, when the IRS owes you money, they’re not just going to hang onto it forever, waiting on you to come and pick it up. Instead, they set and enforce a strict deadline on how long you have to claim a refund. The statute of limitations is three years from the original deadline for the relevant tax year. So, if you’re owed money, get it before time runs out, or prepare to kiss it good-bye!

Getting Audited

One of the things that taxpayers fear most is facing an audit. Thankfully, though, the IRS can’t just indefinitely audit you for a past tax year, at least in most cases.

Instead, they have up to three years from the day you filed a tax return or the tax filing deadline for that year, whichever is later, to audit your return.

Collecting Tax Debts

People will often tell you that you can never escape an IRS tax debt. However, that’s not totally true. There is actually a statue of limitations on how long the IRS has to collect a debt, and it’s ten years. The clock starts ticking once a tax liability has been finalized. Anything that you may still owe when the deadline hits goes away, just like that!

While these statutes of limitations are considered “the law,” know that the IRS always has exceptions in every situation. To learn if any might apply in your case, or if you have other questions about these or further statutes of limitations laws, don’t hesitate to contact a tax professional in your area.

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