Legal Question in Tax Law in Arkansas

Re: Federal Tax SOL for Collection

Did the IRS get a judgment against you? In other words, did they file a suit against you at any time so that a judge issued an Order saying you were responsible for this?

If not, they may be outside the SOL for collection. There are certain things that can extend the SOL, but would need more information. I would be willing to talk to you further about this, if you do not already have an attorney. I would not charge for the initial consultation.

I would strongly advise that you consult an attorney or other tax professional to determine whether you still even owe for 1995 or 1996.

Re: Federal Tax SOL for Collection

Harvey is correct in noting that you may be beyond the statute of limitations on collection, which starts out at ten years from the date of assessment. However, as he suggests, there are many things that can extend the statute of limitations, such as filing a request for an installment agreement, or an offer in compromise, or a request for a collection due process hearing, or even a "voluntary" agreement to extend the statute. You can determine the Collection Statute Expiration Date (or CSED) by calling the IRS and asking. You can also get a "transcript," which will give you the entire history of your account, and you can get one for each tax year in question.

Also, unless you are on a formal installment agreement, you can "designate" your payments to whatever tax period you choose. It would make sense to make your payments to the newer tax years, since the older tax years are the ones that by definition are closest to their CSEDs, and will expire the soonest if not paid.

On my website is an article on the statute of limitations on collection (part of a series I write for the Maryland Society of Accountants on "Dealing with the IRS Collection Division"). Go to the articles section of the website at www.bjhaynes.com.