IRS Collection Statute Expiration Date (CSED)
Understand the 10-year limit on IRS tax collection and how it can impact your tax debt.
What is the CSED?
The Collection Statute Expiration Date (CSED) is the date after which the IRS can no longer legally collect a tax debt. By law, the IRS generally has 10 years to collect unpaid taxes from the date the tax was assessed.
10-Year Collection Period
This period starts on the date your tax liability is assessed, which is typically shortly after you file your tax return.
How It Works
Once the 10-year period expires, the IRS must stop all collection efforts. This includes ending wage garnishments, bank levies, and releasing federal tax liens. The remaining debt is effectively wiped out.
Key Factors:
- Assessment Date: The starting point of the 10-year clock.
- Tolling Events: Certain actions can pause or "toll" the 10-year clock, extending the CSED.
- Expiration: Once the CSED is reached, the IRS writes off the debt.
Important: The CSED clock can be extended by actions such as filing for an Offer in Compromise, requesting an Installment Agreement, filing for bankruptcy, or being out of the country for an extended period.
Is This a Viable Strategy?
While waiting for the CSED to expire might seem like a simple solution, it's often not a practical or advisable strategy. The IRS has powerful collection tools they can use during the 10-year period, which can cause significant financial hardship.
However, understanding your CSED is a critical part of any tax resolution strategy. It helps determine which relief options are most suitable for your situation. For taxpayers nearing their CSED, it can be a powerful factor in negotiations with the IRS.
Tax Relief Comparison Report
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