IRS Collection Statute: When Old Tax Debts Become Uncollectible

Quick overview

The IRS Collection Statute limits the time the government has to collect a tax liability that has been properly assessed. In most cases this period is 10 years from the date of assessment; that deadline is commonly called the Collection Statute Expiration Date (CSED). After the CSED passes, the IRS generally cannot legally collect the assessed tax (internal revenue code §6502; see IRS Publication 594). IRS Pub. 594 – The IRS Collection Process and IRS Topic No. 201 provide the IRS’s plain-language guidance.

This article explains how the 10-year rule works, what can pause or extend the clock, how to verify your CSED, common pitfalls, and practical next steps I use in client cases.

How the collection clock starts and stops

• Start: The collection period generally starts on the assessment date—when the IRS formally posts the tax to the taxpayer’s account. The assessment date is different from the filing date and is recorded in IRS account transcripts.
• Duration: The default period is 10 years from that assessment date (IRC §6502).
• End: When that 10-year period ends (the CSED), the IRS may no longer legally collect the tax by levy or other enforced collection methods.

Important: Certain events suspend (toll) or extend the collection period. Common tolling events include a bankruptcy case, an offer-in-compromise that is pending, an authorized period when collection action is prohibited, or the taxpayer agreeing in writing to extend the collection period. The Internal Revenue Code and IRS guidance list specific tolling rules (see Pub. 594).

Common events that can suspend or extend the CSED

Below are rules you’ll see most frequently. Each situation changes the CSED differently, and small differences matter — so verify with IRS account records or your tax advisor.

• Bankruptcy: When you file for bankruptcy, the CSED is generally tolled (paused) for the period the bankruptcy case is open and for a short time after it closes. (IRS Pub. 594.)
• Offers in compromise (OIC): If an OIC is submitted and accepted, the CSED is handled according to the specific terms of the agreement. If an OIC is pending, the statute may be suspended for that period. See the IRS OIC guidance for details.
• Currently Not Collectible (CNC): Simply being placed in CNC status does not automatically extend the statute — it prevents collection activity temporarily but doesn’t change assessment dates unless another tolling event applies.
• Formal extensions/waivers: Taxpayers sometimes sign waivers or agreements that extend the time the IRS has to collect. Always read any waiver carefully before signing — it can add years to the CSED.
• Administrative or legal pauses: Certain administrative actions (e.g., collection due process appeals, fraud investigations) may affect the timeline.

Note: Actions like filing amended returns or paying a portion of the tax typically do not restart the 10-year collection clock from zero unless the IRS makes a new assessment.

How to verify your CSED (practical steps)

1. Get a tax account transcript or account transcript online at IRS.gov (View Your Account). The transcript shows the assessment date and activity that affects the CSED.
2. Identify the official assessment date for the tax year in question (not the filing date).
3. Add 10 years to that assessment date to compute a raw CSED, then look for entries that indicate tolling events (bankruptcy, OIC, abatements, collections due process appeals) that push the date out.
4. If the IRS sent a Notice of Federal Tax Lien or a Notice of Intent to Levy, those notices do not automatically change the CSED but are evidence the IRS is actively pursuing collection.
5. When in doubt, contact a tax professional or request the IRS provide a statement of account showing the CSED.

In my practice I often request an official account transcript and the IRS’s written confirmation of the CSED for clients before making a strategy decision. That prevents surprises and helps assess options like offers in compromise, installment agreements, or letting the statute run.

Examples (realistic scenarios)

• Example 1 — Individual: Tax assessed on May 10, 2014. Raw CSED = May 10, 2024. If the taxpayer filed for bankruptcy in 2016 and the case closed in 2018, the CSED would be extended by the tolling period caused by the bankruptcy, moving the CSED out by roughly two years.

• Example 2 — Business: Assessment posted March 1, 2017; taxpayer submitted an Offer in Compromise in 2019 that was under review for 18 months before rejection. The period under review would typically toll the collection period, extending the CSED accordingly.

These examples are illustrative. Small case facts change outcomes, so confirm with IRS documentation.

What collection actions end at CSED

When the collection statute expires, the IRS should close the file for enforced collection and stop garnishments, levies, and seizures for that particular assessed liability. However, the IRS may retain the record and could still use the information for certain administrative purposes. The taxpayer’s credit report may still reflect prior collection-related public records depending on the credit bureau timelines; a tax lien, for example, has its own recording and release rules. For guidance on liens see our glossary entry on Understanding Tax Liens: Filing, Release, and How They Affect Credit.

If you believe the IRS continued collection after your CSED, you can request a refund for amounts collected after the expiration and ask the IRS to close the collection file.

Common mistakes and traps

• Relying on memory for the assessment date. Always verify with an IRS transcript.
• Signing an extension or waiver without understanding the consequences. That can add years.
• Assuming the debt is gone for all purposes. Even after CSED, related issues (state taxes, penalties not otherwise barred, or liens recorded by states) may remain.
• Ignoring communication. Not responding to IRS notices can lead to actions that might modify collection status.

See our deeper guides on the statute of limitations and how to avoid extensions: IRS Statute of Limitations: Assessment vs Collection Deadlines and Collection Statute Expiration Date (CSED).

Strategy checklist (what I recommend to clients)

• Obtain an account transcript from the IRS and identify the assessment date.
• Ask the IRS in writing for the Collection Statute Expiration Date (CSED) if you cannot determine it yourself.
• Do not sign any documents that waive the CSED without legal advice.
• If collection is active and CSED is near, consider negotiating an installment agreement, OIC, or other remedy — but know how those options affect the statute.
• If you’re in bankruptcy or contested proceedings, work with your bankruptcy attorney and tax adviser to confirm tolling effects.

When to seek professional help

Contact a tax attorney, enrolled agent, or CPA if any of these apply:

• The CSED is close or has passed and the IRS continues collection.
• You’ve been asked to sign a waiver or extension.
• You need to determine how an offer in compromise, bankruptcy, or another administrative appeal affects CSED.

In my 15+ years advising clients on older tax debts I’ve seen relief delayed by misunderstandings about tolling events and signed waivers. A short, focused review of the IRS account transcript often resolves the issue quickly.

FAQ (brief)

• Can I still be sued for taxes after the CSED? The federal government normally cannot sue to collect after the CSED for that assessed tax. State statutes differ.
• Does the CSED apply to penalties and interest? Penalties and interest that are part of the assessed tax are generally subject to the same collection period; separate legal rules may apply depending on the penalty type.
• Does filing bankruptcy remove the taxes? Bankruptcy can discharge certain tax debts, but discharge rules are complex and depend on age of returns, assessment, and whether returns were filed timely.

Sources and authority

• Internal Revenue Code §6502 (collection statute of limitations). (See U.S. Code and IRS explanations.)
• IRS Publication 594, The IRS Collection Process: https://www.irs.gov/pub/irs-pdf/p594.pdf
• IRS Topic No. 201 — Collection Statute Expiration Date: https://www.irs.gov/taxtopics/tc201

Disclaimer

This article is educational and not legal or tax advice. Details in individual cases vary—consult a licensed tax professional, enrolled agent, CPA, or tax attorney for advice tailored to your situation.