Statutes of Limitation for Collection of Tax

1. The assessment of a tax imposes a lien on all the taxpayer's tangible and intangible real and personal property.
2. IRC § 6502(a) provides that the IRS has ten years from the assessment date to (a) collect the tax by administrative means (e.g., seizures, bank and wage levies, offsets) or (b) institute a suit for collection or judgment.
3. If the IRS commences timely suit to collect tax or obtain a judgment, then it may continue its efforts to administratively collect the tax beyond the ten-year period. IRC § 6502(a).
4. Other exceptions to the ten year limitation period.
   1. If no return for a tax period has been filed, and the tax has not been assessed, then the collection statute expiration date can not be computed and will not expire.
   2. The running of the limitation period is suspended if the taxpayer leaves the United States for more than 6 months. IRC § 6503(c).
   3. The taxpayer signs a waiver of the statutory limitation period. IRC § 6501(c)(4). If the waiver was signed in connection with an installment agreement, then the statutory limitation period expires 90 days after the extended period. IRC § 6502(a)(2)(A).
   4. The running of the statutory limitation period is suspended during the pendency of a bankruptcy, plus an additional 6 months. IRC § 6503(h).
   5. An offer-in-compromise extends the statute for the period of OIC consideration including appeals, plus 30 days. This is a contractual term within the OIC.
   6. Collection Due Process (“CDP”). The limitation period with respect to taxes and periods listed on the CDP Notice are suspended beginning on the date the Service receives a timely hearing request. IRC § 6330(e)(1). The suspension period ends either on the date the Service receives a written withdrawal of the hearing request or the determination resulting from the CDP hearing becomes final. Section 6330(e)(1) further provides that in no event shall any of the limitation periods expire before the 90th day after the day on which there is a final determination with respect to such hearing. If there are fewer than 90 days left in any limitations period after the suspension ends, the remaining period will be 90 days. Treas. Reg. §§ 301.6320-1(g)(3), 301.6330-1(g)(3).

The calculation of the statutory period limiting collection can be complex. Consult with your tax attorney.