Quick summary
- Assessment period: Generally 3 years from the later of the return’s due date (including extensions) or the date the return is filed. (IRS Publication 556)
- Collection period: Generally 10 years from the date the tax is assessed (the Collection Statute Expiration Date, or CSED). (IRS Publication 594)
- No return filed or fraud: No statute of limitations for assessment if no return is filed or if a fraudulent return is filed with intent to evade tax.
- Substantial understatement: If gross income is understated by more than 25%, the assessment period is extended to 6 years.
(See IRS Pub 556: https://www.irs.gov/pub/irs-pdf/p556.pdf and Pub 594: https://www.irs.gov/pub/irs-pdf/p594.pdf.)
How the three timeframes work
1) Filing and the start of the clock
The filing rule matters because the assessment statute generally begins ticking from the later of the return’s due date (including extensions) or the date you actually filed. For example, a Form 1040 due April 15, 2022, but filed March 1, 2023, would be open to assessment for three years from March 1, 2023. If you never file, that three-year limit does not start. (IRS Pub 556)
In my practice I regularly tell clients: file—even a late return—so the assessment window closes at some point. Not filing leaves the IRS free to assess indefinitely.
2) Assessment (audits and adjustments)
- Normal case: IRS has 3 years to assess additional tax. That means to propose adjustments and issue a statutory notice of deficiency or assessment within that period.
- Substantial understatement: If your gross income is understated by more than 25% (generally meaning reported income is less than 75% of actual), the assessment window is 6 years. This is commonly called the “six‑year rule.” (See IRC §6501(e) and IRS guidance in Pub 556.)
- Fraud or failure to file: There is effectively no limitation where a return was not filed or the IRS can prove the return was false with fraudulent intent.
Taxpayers can also agree to extend the assessment period voluntarily (common in complex audits using Form 872), which pauses the three‑year clock while the extension is in effect.
3) Collection (the 10‑year rule and tolling)
Once tax is assessed, the IRS generally has 10 years from the assessment date to collect — the Collection Statute Expiration Date (CSED). After the CSED passes, the IRS generally must close its collection action. This 10‑year period can be suspended or “tolled” by events such as:
- Taxpayer bankruptcy proceedings;
- A timely collection due process (CDP) appeal or a pending offer-in-compromise while under consideration;
- Periods when the taxpayer is outside the United States for at least six months (in certain cases);
- An administrative stay, or when the IRS and taxpayer agree to a suspension.
Because tolling events and agreed extensions change the CSED, it’s important to request your CSED in writing from the IRS if you think a liability is near expiration. See the glossary entry on the Collection Statute Expiration Date (CSED) for details and sample language.
Common exceptions and special rules
- Refund claims: Usually you must file a claim for refund within 3 years of the date you filed your original return or within 2 years of the date you paid the tax, whichever is later. (See IRS Pub 556.)
- Amended returns: Filing an amended return can restart or change certain deadlines. For example, claiming a refund via an amended return must still meet the refund claim deadlines.
- Employment taxes and information returns: Some specialized taxes have different timing rules. Payroll tax liabilities for willful failure to collect or pay trust fund taxes carry criminal and civil penalties and different enforcement mechanics.
- Criminal prosecution: For certain criminal tax offenses, the statute can be longer or (for some crimes) effectively unlimited; always consult counsel. For example, there is generally no limitation for willful evasion when fraud can be proven.
Practical examples (realistic scenarios)
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Example A — Routine assessment:
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You filed your 2020 Form 1040 on March 1, 2021 (original due date April 15, 2021). The IRS generally has until March 1, 2024, to assess additional tax for 2020.
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Example B — Substantial understatement:
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You filed a return that omits a large capital gain representing 40% of your income. The IRS can go back 6 years rather than 3.
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Example C — No return filed:
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You never filed a tax return for 2017. The IRS can prepare a substitute return and assess tax at any time — there is no running 3‑year statute where no return was filed.
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Example D — Collection CSED:
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The IRS assessed tax on July 1, 2018. Absent any tolling or suspension, the CSED would fall on July 1, 2028; after that date the IRS generally cannot levy to collect that assessment.
In my practice I’ve seen clients think they are safe simply because a few years have passed. The safe step is to get confirmation of the assessment or CSED in writing and, if necessary, request a transcript or ask for a CSED calculation from the IRS.
Practical steps to protect your position
- File returns on time or file a prompt late return rather than leaving years unfiled.
- Keep records for at least 7 years in many situations (3 years is minimum for assessment, 6 years for substantial understatement, and 10 years for collection exposure). I advise clients to keep documentation longer for complicated items like stock sales or tax shelters.
- If contacted by the IRS, request a written explanation of the period the IRS is relying on and ask for the Collection Statute Expiration Date if collection is threatened.
- Consider professional help (CPA, enrolled agent or tax attorney) before signing any forms that extend the statute (e.g., consent to extend time to assess) or when negotiating offers-in-compromise. A signed extension can waive natural protections if not carefully limited.
Related topics on FinHelp
- Read more about the Statute of Limitations on Collections for collection‑specific scenarios and CSED mechanics.
- See our entry on the Statute of Limitations on Audits for audit timing and practical defense strategies.
- For refunds and timing to claim credit, see Refund Statute of Limitations.
Frequently asked questions
Q: Can the IRS reopen a closed year after the statute expires?
A: Generally no, except where there is evidence of fraud or a false return, or if you agreed in writing to extend the assessment period. For collection, the IRS may still file certain administrative actions (like liens) if the collection period was tolled before expiration — but once the CSED passes and no tolling remains, the IRS loses collection authority for that assessment.
Q: If I file an amended return, does that restart the clock?
A: An amended return can affect refund claims and assessment exposure. It does not automatically restart the assessment statute for previously assessed items, but it can create new assessment or refund timelines. Consult a professional before filing amended returns that might trigger additional assessment exposure.
Q: How do I confirm my CSED?
A: Request a transcript of account from the IRS or ask for a written CSED calculation. If you are represented, a tax professional can request transcripts and interpret suspension or tolling events.
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 Publication 594, “The IRS Collection Process”: https://www.irs.gov/pub/irs-pdf/p594.pdf
- Internal Revenue Code §6501 (assessment), §6502 (collection) — consult your attorney for statutory interpretation.
Disclaimer: This article is educational and does not constitute legal or tax advice. Individual circumstances vary — consult a CPA or tax attorney for advice specific to your situation.
