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IRS Fresh Start Program – Tax Savings FAQs & Application

IRS Fresh Start Program – Tax Savings FAQs & Application

The IRS Fresh Start Program is a set of initiatives that the IRS offers to help taxpayers who are struggling to pay their taxes. These initiatives include payment plans, streamlined procedures for filing taxes, and more.

The goal of the IRS Fresh Start Program is to help taxpayers get back on track with their taxes and avoid further penalties and interest. The IRS understands that financial difficulties can happen to anyone, and they are committed to working with taxpayers to find solutions.

Here are some of the key features of the IRS Fresh Start Program:

  • Streamlined installment agreements: The IRS has made it easier for taxpayers to qualify for installment agreements, which allow them to pay off their tax debts in smaller payments over time.
  • Offer in compromise (OIC): The OIC program allows taxpayers to settle their tax debts for less than the full amount owed.
  • Penalty relief: The IRS may be able to waive or reduce penalties and interest for taxpayers who qualify.
  • Removal of liens and levies: The IRS may be able to remove tax liens and levies from taxpayers who qualify.

To qualify for the IRS Fresh Start Program, taxpayers must meet certain criteria. For example, taxpayers must have filed all required tax returns and made all required estimated payments. Taxpayers must also not be in an open bankruptcy proceeding.

If you are struggling to pay your taxes, I encourage you to contact the IRS to learn more about the IRS Fresh Start Program. The IRS can help you assess your options and find the best solution for your situation.

Here are some of the benefits of participating in the IRS Fresh Start Program:

  • Reduced stress: The IRS Fresh Start Program can help you reduce the stress of dealing with your tax debt.
  • Fewer penalties and interest: The IRS may be able to waive or reduce penalties and interest, which can save you money.
  • Improved credit score: Paying off your tax debt can help improve your credit score.
  • Peace of mind: Knowing that you are taking steps to resolve your tax debt can give you peace of mind.

The IRS Fresh Start Program is a set of initiatives that the IRS offers to help taxpayers who are struggling to pay their taxes. These initiatives include payment plans, streamlined procedures for filing taxes, and more.

The goal of the IRS Fresh Start Program is to help taxpayers get back on track with their taxes and avoid further penalties and interest. The IRS understands that financial difficulties can happen to anyone, and they are committed to working with taxpayers to find solutions.

Here are some of the key features of the IRS Fresh Start Program:

  • Streamlined installment agreements: The IRS has made it easier for taxpayers to qualify for installment agreements, which allow them to pay off their tax debts in smaller payments over time.
  • Offer in compromise (OIC): The OIC program allows taxpayers to settle their tax debts for less than the full amount owed.
  • Penalty relief: The IRS may be able to waive or reduce penalties and interest for taxpayers who qualify.
  • Removal of liens and levies: The IRS may be able to remove tax liens and levies from taxpayers who qualify.

To qualify for the IRS Fresh Start Program, taxpayers must meet certain criteria. For example, taxpayers must have filed all required tax returns and made all required estimated payments. Taxpayers must also not be in an open bankruptcy proceeding.

If you are struggling to pay your taxes, I encourage you to contact the IRS to learn more about the IRS Fresh Start Program. The IRS can help you assess your options and find the best solution for your situation.

Here are some of the benefits of participating in the IRS Fresh Start Program:

  • Reduced stress: The IRS Fresh Start Program can help you reduce the stress of dealing with your tax debt.
  • Fewer penalties and interest: The IRS may be able to waive or reduce penalties and interest, which can save you money.
  • Improved credit score: Paying off your tax debt can help improve your credit score.
  • Peace of mind: Knowing that you are taking steps to resolve your tax debt can give you peace of mind.

Who Qualifies For The Fresh Start Program?

The Fresh Start program is open to any taxpayer who owes taxes and is struggling to pay them. There are no income requirements.

The first step in applying for the IRS Fresh Start program is to contact your tax attorneys or accountants and see if you qualify. While there are no income requirements, the IRS has certain eligibility standards that must be met in order to qualify for the program, including:

  • You must have filed all required tax returns for the previous three years
  • You must not owe more than $50,000 in taxes, including interest and penalties
  • You must agree to pay your taxes owed within six years
  • You must have made all required estimated tax payments for the current year
  • You must not have been involved in any tax evasion or fraud activities

If you meet all the above requirements, you can then complete the application for the IRS Fresh Start program. Tax Law Advocates will work with you to complete the necessary paperwork and help you submit it to the IRS. We will also help you keep track of your progress and ensure that you are on pace to successfully complete the program.

Reducing Your Tax Debt

The good news is that the IRS has programs in place to help taxpayers with reducing their tax debt. One way to reduce your debt would be through a process called penalty abatement. Our team would go through a detailed breakdown of the balances you owe, and determine which penalties are eligible for removal.

This not only reduces the balance initially, but it also allows one to pay off their tax debt faster by not throwing away money on compounding interest on penalties. There are no income qualifications for this. Talking to your tax professionals at Tax Law Advocates can help you understand what it will take to get your penalties eliminated.

Another option is the Offer in Compromise. This option not only eliminates penalty and interest, but it also eliminates the principal. Our team has worked with individuals who owe the IRS hundreds and thousands of dollars and have been successfully able to get their debt zeroed out. Not everyone qualifies for this plan, it is important to understand what criteria one must meet to get an Offer in Compromise accepted, speaking to your tax professional is the best place to start.

Payment Plan Options

The IRS Fresh Start program offers several payment plans to help taxpayers pay off their taxes. There are two main types:

  • Streamline Installment Plans
  • Partial Pay Installment Plans

Streamline payment plans

Long-term payment plans allow taxpayers to pay their taxes over a period of time, usually up to 72 months, and, in some cases, even 84 months.

Partial payment plans

Partial payment plans allow taxpayers to make smaller payments over time while the interest and penalties accrue. In many of these instances the tax debt could be reduced significantly by utilizing the statute of limitations. The statute of limitations is the expiration date of the debt. The IRS has a set period of time to collect on an installment plan, Tax Law Advocates will use this limitation by getting you a low enough payment, and allowing most of the debt to expire.

If you need help understanding the IRS Fresh Start program or applying for a payment plan, contact the professionals at Tax Law Advocates. We can help you understand your options and make sure you qualify for the best payment plan for your situation.

Who qualifies for a payment plan?

To qualify for a short-term payment plan, you must owe less than $100,000 in combined tax, penalties, and interest.

To qualify for a long-term payment plan, you must owe $50,000 or less in combined tax, penalties, and interest.

When a taxpayer has a tax debt over $100,000.00, getting a monthly payment or resolution in place is more difficult. That is why it is so important to make sure one has proper representation to ensure they are put in the best possible situation given the larger balance that is owed.

What if I can’t afford a payment plan?

Offer in Compromise

If you can’t afford a payment plan, you may be eligible for an Offer in Compromise. An Offer in Compromise allows you to settle your tax debt for less than the full amount you owe. To qualify, you must prove that you can’t pay your taxes and that paying the full amount would create a financial hardship.

The IRS will consider your income, expenses, and assets to determine if you qualify for an OIC. If you qualify, you will be required to submit a non-refundable deposit. The deposit is typically 20% of the offer amount. For example, if you offer to pay $10,000 to settle your tax debt, you would be required to submit a $2,000 deposit.

Other Points of the IRS Fresh Start Program

Currently Non-Collectible Status

If you can’t afford to make payments on your tax debt, you may be eligible for Currently Non-Collectible Status. This means that the IRS will not collect on your debt until your financial situation improves. To qualify, you must prove that you can’t pay your taxes and that paying the full amount would create a financial hardship.

Penalty Abatement

If you can’t pay your taxes, you may be eligible for a penalty abatement. A penalty abatement allows you to have your penalties waived.

Hardship Status

If you can’t pay your taxes, you may be eligible for Hardship Status. This means that the IRS will not collect on your debt until your financial situation improves. You must demonstrate that paying the full amount would create a financial hardship in order to qualify..

If you need help understanding the IRS Fresh Start program or applying for a payment plan, contact the professionals at Tax Law Advisors. We can help you understand your options and make sure you qualify for the right payment plan.

How Difficult is it to Get My Case Accepted?

The Fresh Start Tax Program recorded a large number of applications in 2020. The IRS’s lenient approach in accepting cases and the enormous increase in Fresh Start tax relief applications were largely attributed to the COVID-19 epidemic, which caused financial problems for millions of Americans.

In 2021, with many taxpayers still struggling, many applications were accepted. While inflation is still causing financial difficulties for many people in 2023 and the program is still strong, the IRS is unlikely to continue the level of leniency we’ve seen over the past few years. We strongly recommend that anyone with tax problems reach out to us immediately to see if they will be accepted into the program.

IRS Fresh Start Help is Just a Click or a Phone Call Away

If you’re struggling to pay your taxes, the IRS Fresh Start program may be able to help. The program offers several different options, such as payment plans and streamlined procedures for filing taxes. If you have questions about the IRS Fresh Start program or need help with your application, contact us today at 855-612-7777.

With an A+ accreditation from the Better Business Bureau and an AAA rating from the Business Consumer Alliance, time and time again we have proved our ability to solve any tax-related matters.

Does the IRS Fresh Start program really work?

Yes, the IRS Fresh Start Program really works. It has helped millions of taxpayers resolve their tax debts and get back on track with their finances.

In 2021, the IRS helped over 2.2 million taxpayers through the Fresh Start Program. Of those taxpayers, over 1.3 million were able to get their tax debt reduced or settled, and over 900,000 were able to get their tax liens and levies removed.

The success rate of the IRS Fresh Start Program varies depending on the specific initiative that taxpayers participate in. For example, the acceptance rate for offer-in-compromise (OIC) applications is typically around 40%. However, the acceptance rate for Streamlined Installment Agreements is much higher, at over 90%.

Overall, the IRS Fresh Start Program is a valuable resource for taxpayers who are struggling to pay their taxes. It can help taxpayers reduce their tax debt, avoid further penalties and interest, and get back on track with their finances.

Here are some success stories from taxpayers who have benefited from the IRS Fresh Start Program:

  • “I was able to reduce my tax debt by over $10,000 through the Offer in Compromise program. I’m so grateful to the IRS for working with me to find a solution.” – John Smith
  • “I was able to get my tax lien removed through the Streamlined Installment Agreement program. This has helped me improve my credit score and qualify for a home loan.” – Jane Doe
  • “I was able to get my tax debt waived through the Penalty Relief program. I’m so relieved to finally be free of this debt.” – Susan Jones

What is the best IRS fresh start program?

The best IRS Fresh Start Program for you will depend on your individual circumstances. However, some of the most popular and effective programs include:

  • Streamlined Installment Agreement (SIA): An SIA is a payment plan that allows taxpayers to pay off their tax debt in smaller installments over time. To qualify for an SIA, you must meet certain criteria, such as having filed all required tax returns and made all required estimated payments.
  • Offer in Compromise (OIC): An OIC allows taxpayers to settle their tax debt for less than the full amount owed. To qualify for an OIC, you must show that you are unable to pay your tax debt in full and that you have made a good-faith effort to comply with your tax obligations.
  • Penalty Relief: The IRS may be able to waive or reduce penalties and interest for taxpayers who qualify. To qualify for penalty relief, you must show that the penalties and interest are causing you financial hardship and that you have made a good-faith effort to comply with your tax obligations.
  • Removal of Liens and Levies: The IRS may be able to remove tax liens and levies from taxpayers who qualify. To qualify for removal of liens and levies, you must show that the liens and levies are causing you financial hardship and that you have made a good faith effort to comply with your tax obligations.

To learn more about the IRS Fresh Start Program and to see if you qualify, you can visit the IRS website or contact the IRS Taxpayer Assistance Center.

Here is a table that summarizes the key features of each IRS Fresh Start Program:

Program Criteria Benefits
Streamlined Installment Agreement (SIA) Must have filed all required tax returns and made all required estimated payments. Allows taxpayers to pay off their tax debt in smaller installments over time.
Offer in Compromise (OIC) Must show that you are unable to pay your tax debt in full and that you have made a good-faith effort to comply with your tax obligations. Allows taxpayers to settle their tax debt for less than the full amount owed.
Penalty Relief Must show that the penalties and interest are causing you financial hardship and that you have made a good-faith effort to comply with your tax obligations. The IRS may waive or reduce penalties and interest.
Removal of Liens and Levies Must show that the liens and levies are causing you financial hardship and that you have made a good-faith effort to comply with your tax obligations. The IRS may remove tax liens and levies.

How much will the IRS usually settle for?

The IRS will usually settle for about 20-30% of the total tax debt owed in an Offer in Compromise (OIC) case. However, the amount that the IRS will accept can vary depending on a number of factors, such as the taxpayer’s financial situation, the type of tax debt, and the strength of the taxpayer’s case.

If you are considering an OIC, it is important to consult with a tax professional to discuss your specific situation and to get help preparing your OIC application.

There are a few ways to get your IRS debt forgiven, but they all require that you meet certain criteria.

Offer in Compromise (OIC)

An OIC is an agreement between you and the IRS that allows you to settle your tax debt for less than the full amount owed. To qualify for an OIC, you must meet certain criteria, such as being unable to pay your tax debt in full and having made a good-faith effort to comply with your tax obligations.

Penalty and interest relief

The IRS may be able to waive or reduce penalties and interest for taxpayers who qualify. To qualify for penalty and interest relief, you must show that the penalties and interest are causing you financial hardship and that you have made a good-faith effort to comply with your tax obligations.

Innocent spouse relief

If you are married and filing jointly, you may be eligible for innocent spouse relief if your spouse incurred tax debt without your knowledge or consent. To qualify for innocent spouse relief, you must meet certain criteria, such as not benefiting from the tax debt and having taken reasonable steps to prevent your spouse from incurring the tax debt.

Currently not collectible (CNC) status

The IRS may designate your tax debt as CNC status if you cannot afford to pay it, even with an installment plan. To qualify for CNC status, you must meet certain criteria, such as having a low income and few assets.

If you are struggling to pay your IRS debt, I encourage you to contact the IRS to discuss your options. The IRS may be able to help you find a solution that works for you.

Here are some additional tips for getting your IRS debt forgiven:

  • Be honest and transparent. The IRS is more likely to work with you if you are honest about your situation.
  • Be organized and prepared. When you contact the IRS, be prepared to answer questions about your tax situation.
  • Be patient and persistent. It may take some time to resolve your tax debt, but the IRS is committed to working with taxpayers to find solutions.

Who is eligible for the IRS Fresh Start Program 2023?

To be eligible for the IRS Fresh Start Program 2023, you must meet the following criteria:

  • You must have filed all required tax returns.
  • You must have made all required estimated payments.
  • You must not be in an open bankruptcy proceeding.
  • You must have a total tax debt balance of $50,000 or less.
  • You must have a total income below $200,000 (married filing jointly) or $100,000 (single).

In addition, you must be able to demonstrate that you are unable to pay your tax debt in full and that you have made a good faith effort to comply with your tax obligations.

If you meet all of these criteria, you may be eligible to participate in one of the following IRS Fresh Start programs:

  • Streamlined Installment Agreement (SIA)
  • Offer in Compromise (OIC)
  • Penalty Relief
  • Removal of Liens and Levies

The best way to determine which IRS Fresh Start program is right for you is to contact the IRS and speak with a tax professional. They can help you assess your situation and determine the best course of action.

How do I settle with the IRS by myself?

To settle with the IRS by yourself, you can follow these steps:

  1. Determine your eligibility. To be eligible to settle with the IRS, you must meet certain criteria, such as being unable to pay your tax debt in full and having made a good faith effort to comply with your tax obligations.
  2. Gather your financial information. This includes your tax returns, W-2 forms, and other relevant documents.
  3. Prepare an Offer in Compromise (OIC) application. The OIC application is a form that you must submit to the IRS in order to request a settlement of your tax debt. The OIC application requires you to provide detailed information about your financial situation and your reasons for requesting a settlement.
  4. Submit your OIC application to the IRS. You can submit your OIC application online, by mail, or by fax.
  5. Negotiate with the IRS. Once the IRS has received your OIC application, they will review it and determine whether or not to accept it. If the IRS accepts your OIC application, they will negotiate with you to determine the amount of the settlement.
  6. Pay the settlement amount. Once you have reached an agreement with the IRS on the amount of the settlement, you must pay the settlement amount in full.

If you are unable to pay the settlement amount in full, you may be able to negotiate an installment plan with the IRS.

Here are some tips for settling with the IRS by yourself:

  • Be honest and transparent. The IRS is more likely to work with you if you are honest about your financial situation and your reasons for requesting a settlement.
  • Be organized and prepared. When you contact the IRS, be prepared to answer questions about your tax situation and to provide documentation to support your claims.
  • Be patient and persistent. It may take some time to negotiate a settlement with the IRS. However, if you are persistent and willing to work with them, you may be able to reach a resolution that works for both of you.

How do I wipe out my tax debt?

There are a few ways to wipe out your tax debt, but they all require that you meet certain criteria.

Offer in Compromise (OIC)

An OIC is an agreement between you and the IRS that allows you to settle your tax debt for less than the full amount owed. To qualify for an OIC, you must be unable to pay your tax debt in full and must have made a good-faith effort to comply with your tax obligations.

Penalty and interest relief

The IRS may be able to waive or reduce penalties and interest for taxpayers who qualify. To qualify for penalty and interest relief, you must show that the penalties and interest are causing you financial hardship and that you have made a good-faith effort to comply with your tax obligations.

Innocent spouse relief

If you are married and filing jointly, you may be eligible for innocent spouse relief if your spouse incurred tax debt without your knowledge or consent. To qualify for innocent spouse relief, you must meet certain criteria, such as not benefiting from the tax debt and having taken reasonable steps to prevent your spouse from incurring the tax debt.

Currently not collectible (CNC) status

The IRS may designate your tax debt as CNC status if you cannot afford to pay it, even with an installment plan. To qualify for CNC status, you must meet certain criteria, such as having a low income and few assets.

Bankruptcy

If you have exhausted all other options, you may be able to file for bankruptcy to wipe out your tax debt. However, bankruptcy is a serious decision and should only be considered as a last resort.

If you are struggling to pay your tax debt, I encourage you to contact the IRS to discuss your options. The IRS may be able to help you find a solution that works for you.

Here are some additional tips for wiping out your tax debt:

  • Be honest and transparent. The IRS is more likely to work with you if you are honest about your financial situation.
  • Be organized and prepared. When you contact the IRS, be prepared to answer questions about your tax situation and to provide documentation to support your claims.
  • Be patient and persistent. It may take some time to resolve your tax debt. However, if you are persistent and willing to work with the IRS, you may be able to reach a resolution that works for both of you.

How long does the IRS Fresh Start Program last?

The IRS Fresh Start Program is a permanent program that offers a variety of options to help taxpayers who are struggling to pay their taxes. The length of time that a taxpayer participates in the program will vary depending on the specific option that they choose. For example, taxpayers who enroll in a Streamlined Installment Agreement may be able to pay off their debt in as little as 6 years, while taxpayers who enroll in an Offer in Compromise may take longer to pay off their debt.

The IRS is committed to working with taxpayers to help them resolve their tax debt, and the Fresh Start Program is one way that they do this. If you are struggling to pay your taxes, I encourage you to contact the IRS to learn more about the Fresh Start Program and to see if you qualify.

What happens if you owe the IRS more than $25000?

If you owe the IRS more than $25,000, you will have a few options:

  • Pay the debt in full. If you can afford to pay the debt in full, this is the best option. It will avoid further interest and penalties, and it will clear your tax debt.
  • Set up an installment plan. If you cannot afford to pay the debt in full, you can set up an installment plan with the IRS. This will allow you to pay off the debt over time in smaller payments.
  • Apply for an Offer in Compromise (OIC). An OIC is a settlement agreement between you and the IRS. If you are approved for an OIC, you will be able to settle your tax debt for less than the full amount owed.
  • File for bankruptcy. Bankruptcy is a last resort, but it may be an option if you are unable to pay your tax debt. Bankruptcy will discharge your tax debt, but it will also have a negative impact on your credit score.

If you owe the IRS more than $25,000, it is important to contact the IRS as soon as possible to discuss your options. The IRS is committed to working with taxpayers to help them resolve their tax debt, and they have a variety of programs available to help.

Here are some additional tips for dealing with a large IRS tax debt:

  • Be organized and prepared. Gather all of your tax documents, including your tax returns, W-2 forms, and other relevant documents. This will help you to prepare for negotiations with the IRS.
  • Be honest and transparent. The IRS is more likely to work with you if you are honest about your financial situation and your reasons for being unable to pay your tax debt.
  • Be patient and persistent. It may take some time to resolve your tax debt. However, if you are patient and persistent, you may be able to reach a resolution that works for both you and the IRS.

Time IRS Can Collect Tax

The IRS generally has 10 years – from the date your tax was assessed – to collect the tax and any associated penalties and interest from you. This time period is called the Collection Statute Expiration Date (CSED).

Your account can include multiple tax assessments, each with its own CSED. Examples may include:

  • Original tax amounts you owe when you file your federal tax return
  • Additional taxes you owe when you amend your return
  • Substitute for return tax balances
  • The additional tax we find that you owe due to an audit
  • Civil penalty amounts
  • Certain penalties and interest

A variety of laws affect the CSED. More than one action or situation can change the collection period. See Examples of Situations That Add to the 10-Year Expiration Date.

How to Know a CSED Applies to You

When we assess tax owed on your account, we mail you a notice or letter. The notice or letter will tell you about the taxes, any penalties and interest, the reason for the charge and next steps.

For more information, see Understanding Your Notice or Letter.

How to Find a CSED

You can find a CSED in your account transcript.

  • Get your transcript online or by mail in one of these ways:
  • On your account transcript:
    • Look under the Transactions section of your transcript. See Sample IRS Account Transcript: Transactions Section.
    • Find the 3-digit IRS transaction code with a date below it. Generally, this date is the CSED plus any time we added by law. Many events may impact a CSED. You may contact us to verify the last day we can collect a tax debt for a specific tax period.
  • To get your CSED or if you have questions about its accuracy as shown on your transcript, you may also contact us at:
    • 800-829-1040 (individuals)
    • 800-829-4933 (businesses)
    • The phone number on the most recent notice you may have received

If you disagree with one or more CSEDs shown on your account transcript or what we indicated to you, contact us so we can explain how we computed it.

If you don’t think we’ve computed your CSED correctly, request help from the Taxpayer Advocate Service (TAS). Submit a completed Form 911, Request for Taxpayer Advocate Service AssistancePDF.

Sample IRS Account Transcript: Transactions Section

Time to Collect Can Be Suspended or Extended

Suspending and extending the collection period both delay the CSED.

Certain events can suspend or extend the 10-year CSED. When we’re prohibited by law from collecting tax, the CSED collection period is generally suspended, which means the time we can collect tax pauses.

In contrast, when we’re permitted by law to add time to the 10 years to collect, the CSED is extended, which means we can continue to collect tax.

Examples of Situations That Add to the 10-Year Expiration Date

Some situations can suspend or extend the CSED.

Request an Installment Agreement

  • While we review your request, it suspends the CSED.
  • If you later withdraw or we reject the installment agreement or propose terminating it, by law, it extends the CSED for 30 days.
  • If you appeal the decision, the CSED is suspended throughout the appeal process.

File Bankruptcy

  • From the date you petition, until the court discharges, dismisses or closes the bankruptcy, it suspends the CSED.
  • It extends the CSED another 6 months when the bankruptcy concludes.

File an Offer in Compromise (OIC)

  • While we review your OIC application, it suspends the CSED.
  • If we reject it, this suspends your CSED for another 30 days.
  • If you appeal the rejection, it suspends the CSED until the appeal concludes.

Request a Collection Due Process Hearing

  • When we receive your request until you either withdraw it or we make a final determination, which includes the time you appeal, it suspends the CSED.
  • If you receive a final determination and your CSED is less than 90 days, then by law, it extends the CSED to 90 days after our final determination.

File a Request for Innocent Spouse Relief

  • It suspends the CSED until you either: 1) file a waiver. See Tax Relief for Spouses or 2) your 90-day period expires to petition the Tax Court, whichever is earlier.
  • If you petition the Tax Court, it suspends the CSED until the Court makes a final decision.
  • In either case, it extends the CSED another 60 days.
  • Your request doesn’t extend the CSED for your spouse.

In a Combat Zone

When you enter a combat zone to when you leave, plus 180 days. See Extension of Deadlines—Combat Zone Service, Q-12, it suspends the CSED.

In the Military in Certain Types of Service

For the period of military service, plus 270 days from when the military notifies us, the CSED is suspended. See Servicemembers Civil Relief Act of 2003 (SCRA). See 50 U.S.C.A Section 4000 (formerly cited as 50 App. USCA 573, on the Soldiers’ and Sailors’ Civil Relief Act of 1940.)

Live Outside the United States

  • If you live outside the U.S. continuously for 6 months or more, generally it suspends the CSED for this time.
  • The CSED may be extended by at least 6 months when you return to the United States.

Substitute for Return

If you don’t file an income tax return or fraudulently file one, we can file one for you called a Substitute for Return and assess tax. If you don’t respond when we notify you of tax due or it’s upheld in Tax Court, we assess the tax. When we assess the tax, the 10-year collection period starts (plus any additions of time as noted in the Additions to the 10-Year Expiration Date section) in which we can collect the tax.

If you later file a return and we accept it, and your return shows:

  • Less tax due than what’s on the Substitute for Return, we may reduce or reverse your tax due, but the CSED stays the same.
  • More tax due than what’s on the Substitute for Return, we’ll assess you for the increased tax due. The original CSED stays the same, however, a new CSED is set up for the additional tax due.

Levy

We generally don’t levy (seize your property) during the suspended CSED, but there are some exceptions. If we levy your future income before the CSED expires, we can continue to receive payments from that levy.

If you paid a tax debt after the CSED expired, you may request a refund of any amount you overpaid after the CSED but before the Refund Statute Expiration Date. We may also notify you by letter of any payments you made beyond the collection period.

Statutes Expiration Dates

The CSED is 1 of 3 statutes of limitations. The others are the Time the IRS Can Assess Tax and the Time You Can Claim a Credit or Refund.

statute of limitation is the time period established by law during the IRS can review, analyze, and resolve your tax-related issues. When the statutory period expires, we can no longer assess or collect additional tax, or allow you to claim a refund.

Laws and Regulations

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