How Long Does The IRS Have To Collect My Taxes?
When it comes to tax debt, the IRS generally has up to 10 years from the date your taxes were assessed to collect from you. If you can make it past those 10 years, you may never have to pay back your taxes. This strategy will not work for Maryland taxes as there is no statute of limitations in place and your state taxes will never expire.
The IRS doesn’t have forever to collect taxes from you. As a general rule, according to the statute of limitations, they can collect up to 10 years from the date your taxes were assessed. The date of assessment is usually the date the tax return is due or the date the return is actually filed, if you filed late. That’s another reason to make sure you file your returns, even if they are late and even if you owe money: If you don’t file the returns, the taxes may never expire!
Does The IRS Ever Have More Than 10 Years To Collect Against Me?
Yes, this 10-year deadline can be extended. First, the IRS can ask you to voluntarily extend the deadline, in an effort to get more time to collect the taxes. Filing an OIC will also extend the deadline during the time the IRS is considering your offer – and remember, it can take up to 2 years for you to hear a decision from them. Finally, if you file for bankruptcy, the deadline will be “tolled” or extended by the amount of time you are in bankruptcy.
Note that if you are granted CNC status, the statute will continue to run and will not extend the 10-year deadline. The danger here is that in order to qualify for CNC status, you must give the IRS all your financial information, which may be used now or in the future to collect from you. Installment agreements that continue after the expiration date may not extend the deadline.
What About My Maryland Taxes?
Unfortunately, this strategy will not work with Maryland tax debt. There is no statute of limitations on tax debt in Maryland, so your state debt will never expire. Worse yet, it continues to accrue interest at 13% per year. This means your debt will DOUBLE every 6 years. Ultimately, you will probably have to settle your Maryland tax debt by payment plan or bankruptcy.