IRS Statute of Limitations: Assessment vs Collection Deadlines

Quick overview

The IRS statute of limitations creates two distinct deadlines that taxpayers should track:

• Assessment: The IRS generally has three years from the date you file a return to assess additional tax. That period extends to six years if you underreport gross income by more than 25%. There is no time limit if you never file or if the IRS proves fraud. (IRS, Publication 556: “Examination of Returns, Appeal Rights, and Claims for Refund”).

• Collection: Once tax is assessed, the IRS normally has ten years to collect the liability. This ten-year collection period is commonly called the Collection Statute Expiration Date (CSED). If the IRS has not collected by the CSED, the liability is typically unenforceable. (IRS guidance on statutes of limitation).

For authoritative guidance, see IRS Publication 556 and the IRS small-business statute page (IRS, “Understanding the statute of limitations”).

How the assessment clock works

1. Filing date starts the clock. For most taxpayers, the three-year assessment period runs from the date the return is filed. If you file on time for a calendar-year return, that date is usually April 15 (or the date you actually filed if you filed early or with an extension).

2. Substantial understatement extends to six years. If you omit more than 25% of your gross income, the period to assess additional tax generally increases to six years. This is commonly called the “substantial understatement” rule (Internal Revenue Code and IRS Pub. 556).

3. No return or fraud: no limit. If you never file a return, there is no statute of limitations for assessment. Similarly, fraudulent returns or willful tax evasion remove the limitation period.

4. Consents can extend the assessment period. Taxpayers sometimes sign Form 872 (Consent to Extend the Time to Assess Tax) to give the IRS more time to examine a return. The consent should be in writing and will include an agreed extension date. Always get professional advice before signing such a consent.

5. Amended returns and claims for refund. Filing an amended return or a claim for refund creates its own timing rules for when the IRS must act. See IRS Pub. 556 and our related article “When an Amended Return Is Too Late: Statutes of Limitation and Alternatives” (https://finhelp.io/glossary/when-an-amended-return-is-too-late-statutes-of-limitation-and-alternatives/).

How the collection clock works (CSED)

• The collection period normally begins on the date the tax is assessed. For example, if the IRS posts an assessment to your account on March 1, 2019, the ten-year collection period would ordinarily expire on March 1, 2029 (subject to tolling events).

• The CSED is an account-level date. You can find the CSED on your IRS account transcript (Account Transcript shows the CSED) or by asking the IRS or your tax professional to pull your account transcript. The transcript will list the assessment date and the CSED field.

• The CSED can be shortened or lengthened by specific events: payments reduce the remaining collection period only by reducing the underlying balance (they don’t generally shorten the statutory time left), while tolling events pause the clock.

For a practical primer on the CSED, see our glossary page: “Collection Statute Expiration Date (CSED)” (https://finhelp.io/glossary/collection-statute-expiration-date-csed/).

Common tolling and suspension events that pause or extend the 10-year collection period

Several events can stop or suspend the ten-year collection clock. The most commonly encountered include:

• Bankruptcy: Filing for bankruptcy stays collection actions and typically tolls (pauses) the collection period for the duration of the bankruptcy stay. The IRS cannot continue collection while federal bankruptcy protections apply.

• Offer in Compromise (OIC): When you submit a timely and valid Offer in Compromise, the collection period may be suspended while the offer is pending and during certain appeals.

• Collection Due Process (CDP) or Appeals: If you file a CDP request or appeal a levy or lien, the period may be suspended while the appeal is pending.

• Absence from the United States: The collection period is tolled for certain periods when the taxpayer is outside the United States.

• Levy or seizure litigation: Time during which collection is legally prohibited or when litigation is pending can toll the CSED.

• Written consents or administrative agreements: Specific written agreements between the IRS and taxpayer that suspend collection can extend the statutory period.

Note: The IRS publishes details and the statutory language that governs tolling and suspension. Because rules differ by circumstance, consult IRS Pub. 556 and a tax professional before relying on a claimed tolling event.

Practical examples and calculations

Example 1 — Typical case (assessment and CSED calculation):

• Return filed: April 15, 2016
• IRS assesses additional tax: July 2, 2018 (assessment date)
• Collection period ends: July 2, 2028 (ten years from assessment) — that’s the CSED

Example 2 — Substantial understatement (assessment window lengthens):

• Return filed: April 15, 2016
• Taxpayer omitted 30% of gross income — IRS can assess back to April 15, 2010 (six years) for underreporting

Example 3 — No return filed:

• No filing for tax year 2014 — IRS can assess at any time; no assessment statute of limitations applies

Example 4 — Tolling during bankruptcy:

• Assessment date: March 1, 2014
• Taxpayer files bankruptcy on March 1, 2017 and the bankruptcy lasts two years
• The ten-year clock pauses for the bankruptcy period, so CSED is extended by roughly two years beyond the original date. The exact calculation depends on the precise suspension dates on the account transcript.

How to verify your CSED and check your account

1. Get your IRS account transcript. The account transcript contains the assessment date and the CSED field. You can request a transcript online at IRS.gov or ask your authorized tax practitioner to obtain it.

2. Review IRS notices carefully. Many IRS notices list the assessment date; use that date to calculate the CSED (10 years out), unless notices or transcripts indicate tolling events or agreements.

3. Make a formal request. If you believe a liability is past the CSED, request the IRS to confirm in writing and provide a copy of the account transcript to demonstrate the CSED.

4. Don’t rely on assumptions. Collection deadlines can be affected by later assessments, penalties, interest, or offsets; always confirm with documentation.

State tax statutes differ

State tax agencies have their own statutes of limitations for assessment and collection. An expired federal CSED does not automatically eliminate state tax obligations. Keep state filing and collection rules in mind and check with your state revenue department.

Common mistakes and misconceptions

• Assuming the IRS can collect forever. Many taxpayers mistakenly believe tax debts never expire. For most assessed liabilities, the IRS must collect within ten years of assessment unless actions pause that clock.

• Equating audit length with collection length. An audit (assessment activity) and the collection statute are separate clocks; an extended audit doesn’t automatically create a longer collection period unless an assessment is made or a consent to extend is signed.

• Destroying records too soon. Even if the assessment period expires, keep key records longer—six to seven years, and longer if you have complex transactions, carryovers, or ongoing disputes.

Professional tips (from practice)

• Always document agreements. If you sign a consent to extend (Form 872) or enter an installment agreement or offer in compromise, keep a copy and note the effect on assessment or collection dates.

• Check the IRS account transcript early. My clients often save time and avoid surprises by having me pull their account transcript to confirm the CSED and past assessments.

• If you get a notice, act quickly. Notices often contain critical dates. If a notice is unclear, request account transcripts and consult a tax professional — responding promptly can prevent unnecessary collections.

• Consider statute of limitations in negotiations. Knowing the CSED date can be a powerful negotiating tool during collection discussions or offers in compromise.

Frequently asked questions

Q: Can the IRS extend the statute of limitations?
A: Yes. A taxpayer can agree in writing to extend the assessment period (Form 872). Certain actions, such as filing for bankruptcy or submitting an Offer in Compromise, can also suspend the collection period.

Q: What if the IRS tries to collect after the CSED?
A: If the CSED has passed and no applicable tolling rules apply, the IRS generally cannot legally collect the tax. Request a written confirmation from the IRS showing the CSED has passed and, if necessary, consult counsel.

Q: Does bankruptcy erase tax debts?
A: Bankruptcy can discharge certain tax debts depending on factors like the age of the tax return and whether the tax was assessed more than three years before the bankruptcy filing. Bankruptcy also pauses collection actions while the automatic stay applies. Consult a bankruptcy attorney and tax advisor.

Related FinHelp articles

• Collection Statute Expiration Date (CSED): https://finhelp.io/glossary/collection-statute-expiration-date-csed/
• Statute of Limitations on Assessments: https://finhelp.io/glossary/statute-of-limitations-on-assessments/
• Statute of Limitations for Taxes: Filing, Assessment, and Collection: https://finhelp.io/glossary/statute-of-limitations-for-taxes-filing-assessment-and-collection/

These internal resources provide deeper, related discussions and calculators for common scenarios.

Sources and further reading

• IRS, Publication 556, “Examination of Returns, Appeal Rights, and Claims for Refund” (current guidance): https://www.irs.gov/pub/irs-pdf/p556.pdf
• IRS small business page, “Understanding the statute of limitations”: https://www.irs.gov/businesses/small-businesses-self-employed/understanding-the-statute-of-limitations
• IRS online account and transcript information: https://www.irs.gov/individuals/get-transcript

Professional disclaimer

This article explains general rules about the IRS statute of limitations for assessment and collection and is for educational purposes only. It is not legal or tax advice for any individual case. For guidance tailored to your situation, consult a licensed tax professional or tax attorney.