Free Tax Debt Analysis By Enrolled Agents

Wondering how long you have to file a claim for refund? 

Wondering how long the IRS has to collect tax due?

Statutes of Limitation
Another reason to file a tax return is because the clock is running on any refunds due.  In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund.  If no return is filed to claim the refund within the three years, the money becomes the property of the U.S. Treasury.  After the expiration of the refund statute, not only does the law prevent the issuance of a refund check, it also prevents the application of any credits, including over-payments of estimated or withholding taxes, to other tax years that are underpaid. 

On the other hand, the statute of limitations for IRS to assess and collect any outstanding balances does not start until a return has been filed.  In other words, there is no statute of limitations for assessing and collecting the tax if no returns have been filed.

What can you do?
So, what should a person do who has one or more unfiled federal tax returns?  They should immediately contact a tax professional or the IRS and get the delinquent returns filed.  Failure to take prompt corrective action only compounds the problem! 

For people with multiple unfiled returns, IRS practice is generally to limit investigations and examinations to the last six years. 

Statutes of limitations generally limit the time the IRS has to make tax assessments to within three years after a return is due or filed, whichever is later. That particular date is also referred to as the statute expiration date. Statute of limitations will also limit the time you have to file a claim for credit or refund.

The IRS has certain time limits to collect the tax due. When those statutory time limits lapse, then the liability "drops off" and the IRS can no longer pursue collection action for those tax period.

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