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Assessment - Three years from date return is
filed Collection - Ten years from date of
assessment In most cases the IRS does not have an unlimited amount
of time to assess or collect a tax. In a nutshell, the IRS
must assess a tax within three years of the taxpayer filing
a tax return, and must collect it within ten years after the
assessment. These periods of time may be tolled, or
extended, by certain events. The statute of limitations of the enforceability of a tax
lien is the same as for the collection of the tax, i.e., ten
years from date of assessment. TITLE 26, Subtitle F, CHAPTER 66, Subchapter A, Sec.
6501 LIMITATIONS ON AUDIT OR ASSESSMENT § 6501 (a) General rule Except as otherwise provided in this section, the amount
of any tax imposed by this title shall be assessed within 3
years after the return was filed (whether or not such return
was filed on or after the date tax became due) and before
the expiration of 3 years after the date on which any part
of such tax was paid, and no proceeding in court without
assessment for the collection of such tax shall be begun
after the expiration of such period. (b) Time return deemed filed (1) Early return For purposes of this section, a return of tax imposed by
this title, except tax imposed by chapter 3, 21, or 24,
filed before the last day prescribed by law or by
regulations promulgated pursuant to law for the filing
thereof, shall be considered as filed on such last day. (2) Return of certain employment taxes and tax imposed by
chapter 3 For purposes of this section, if a return of tax imposed
by chapter 3, 21, or 24 for any period ending with or within
a calendar year is filed before April 15 of the succeeding
calendar year, such return shall be considered filed on
April 15 of such calendar year. (3) Return executed by Secretary Notwithstanding the provisions of paragraph (2) of
section 6020(b), the execution of a return by the Secretary
pursuant to the authority conferred by such section shall
not start the running of the period of limitations on
assessment and collection. (4) Return of excise taxes For purposes of this section, the filing of a return for
a specified period on which an entry has been made with
respect to a tax imposed under a provision of subtitle D
(including a return on which an entry has been made showing
no liability for such tax for such period) shall constitute
the filing of a return of all amounts of such tax which, if
properly paid, would be required to be reported on such
return for such period. (c) Exceptions (1) False return In the case of a false or fraudulent return with the
intent to evade tax, the tax may be assessed, or a
proceeding in court for collection of such tax may be begun
without assessment, at any time. (2) Willful attempt to evade tax In case of a willful
attempt in any manner to defeat or evade tax imposed by this title (other than tax imposed by subtitle
A or B), the tax may be assessed, or a proceeding in court
for the collection of such tax may be begun without
assessment, at any time. (3) No return In the case of failure to file a return, the tax may be
assessed, or a proceeding in court for the collection of
such tax may be begun without assessment, at any time. (4) Extension by agreement Where, before the expiration of the time prescribed in
this section for the assessment of any tax imposed by this
title, except the estate tax provided in chapter 11, both
the Secretary and the taxpayer have consented in writing to its assessment after such time,
the tax may be assessed at any time prior to the expiration
of the period agreed upon. The period so agreed upon may be
extended by subsequent agreements in writing made before the
expiration of the period previously agreed upon. (5) Tax resulting from changes in certain income tax or
estate tax credits For special rules applicable in cases where
the adjustment of certain taxes allowed as a credit against
income taxes or estate taxes results in additional tax, see
section 905(c) (relating to the foreign tax credit for
income tax purposes) and section 2016 (relating to taxes of
foreign countries, States, etc., claimed as credit against
estate taxes). (6) Termination of private foundation status In the case of a tax on termination of private foundation
status under section 507, such tax may be assessed, or a
proceeding in court for the collection of such tax may be
begun without assessment, at any time. (7) Special rule for certain amended returns Where, within the 60-day period ending on the day on
which the time prescribed in this section for the assessment
of any tax imposed by subtitle A for any taxable year would
otherwise expire, the Secretary receives a written document
signed by the taxpayer showing that the taxpayer owes an
additional amount of such tax for such taxable year, the
period for the assessment of such additional amount shall
not expire before the day 60 days after the day on which the
Secretary receives such document. (8) Failure to notify Secretary under section 6038B In the case of any tax imposed on any exchange or
distribution by reason of subsection (a), (d), or (e) of
section 367, the time for assessment of such tax shall not
expire before the date which is 3 years after the date on
which the Secretary is notified of such exchange or
distribution under section 6038B(a). (9) Gift tax on certain gifts not shown on return If any gift of property the value of which is determined
under section 2701 or 2702 (or any increase in taxable gifts
required under section 2701(d)) is required to be shown on a
return of tax imposed by chapter 12 (without regard to
section 2503(b)), and is not shown on such return, any tax
imposed by chapter 12 on such gift may be assessed, or a
proceeding in court for the collection of such tax may be
begun without assessment, at any time. The preceding
sentence shall not apply to any item not shown as a gift on
such return if such item is disclosed in such return, or in
a statement attached to the return, in a manner adequate to
apprise the Secretary of the nature of such item. (d) Request for prompt assessment Except as otherwise provided in subsection (c), (e), or
(f), in the case of any tax (other than the tax imposed by
chapter 11 of subtitle B, relating to estate taxes) for
which return is required in the case of a decedent, or by
his estate during the period of administration, or by a
corporation, the tax shall be assessed, and any proceeding
in court without assessment for the collection of such tax
shall be begun, within 18 months after written request
therefor (filed after the return is made and filed in such
manner and such form as may be prescribed by regulations of
the Secretary) by the executor, administrator, or other
fiduciary representing the estate of such decedent, or by
the corporation, but not after the expiration of 3 years
after the return was filed. This subsection shall not apply
in the case of a corporation unless - (1) (A) such written request notifies the Secretary that the
corporation contemplates dissolution at or before the
expiration of such 18-month period, (B) the dissolution is
in good faith begun before the expiration of such 18-month
period, and (C) the dissolution is completed; (2) (A) such written request notifies the Secretary that a
dissolution has in good faith been begun, and (B) the
dissolution is completed; or (3) a dissolution has been completed at the time such
written request is made. (e) Substantial omission of items Except as otherwise provided in subsection (c) - (1) Income taxes In the case of any tax imposed by subtitle A - (A) General rule If the taxpayer omits from gross income an amount
properly includible therein which is in excess of 25 percent
of the amount of gross income stated in the return, the tax
may be assessed, or a proceeding in court for the collection
of such tax may be begun without assessment, at any time
within 6 years after the return was filed. For purposes of
this subparagraph - (i) In the case of a trade or business, the term ''gross
income'' means the total of the amounts received or accrued
from the sale of goods or services (if such amounts are
required to be shown on the return) prior to diminution by
the cost of such sales or services; and (ii) In determining the amount omitted from gross income,
there shall not be taken into account any amount which is
omitted from gross income stated in the return if such
amount is disclosed in the return, or in a statement
attached to the return, in a manner adequate to apprise the
Secretary of the nature and amount of such item. (B) Constructive dividends If the taxpayer omits from gross income an amount
properly includible therein under section 551(b) (relating
to the inclusion in the gross income of United States
shareholders of their distributive shares of the
undistributed foreign personal holding company income), the
tax may be assessed, or a proceeding in court for the
collection of such tax may bebegun without assessment, at
any time within 6 years after the return was filed. (2) Estate and gift taxes In the case of a return of estate tax under chapter 11 or
a return of gift tax under chapter 12, if the taxpayer omits
from the gross estate or from the total amount of the gifts
made during the period for which the return was filed items
includible in such gross estate or such total gifts, as the
case may be, as exceed in amount 25 percent of the gross
estate stated in the return or the total amount of gifts
stated in the return, the tax may be assessed, or a
proceeding in court for the collection of such tax may be
begun without assessment, at any time within 6 years after
the return was filed. In determining the items omitted from
the gross estate or the total gifts, there shall not be
taken into account any item which is omitted from the gross
estate or from the total gifts stated in the return if such
item is disclosed in the return, or in a statement attached
to the return, in a manner adequate to apprise the Secretary
of the nature and amount of such item. (3) Excise taxes In the case of a return of a tax imposed under a
provision of subtitle D, if the return omits an amount of
such tax properly includible thereon which exceeds 25
percent of the amount of such tax reported thereon, the tax
may be assessed, or a proceeding in court for the collection
of such tax may be begun without assessment, at any time
within 6 years after the return is filed. In determining the
amount of tax omitted on a return, there shall not be taken
into account any amount of tax imposed by chapter 41, 42,
43, or 44 which is omitted from the return if the
transaction giving rise to such tax is disclosed in the
return, or in a statement attached to the return, in a
manner adequate to apprise the Secretary of the existence
and nature of such item. (f) Personal holding company tax If a corporation which is a personal holding company for
any taxable year fails to file with its return under chapter
1 for such year a schedule setting forth - (1) the items of gross income and adjusted ordinary gross
income, described in section 543, received by the
corporation during such year, and (2) the names and addresses of the individuals who owned,
within the meaning of section 544 (relating to rules for
determining stock ownership), at any time during the last
half of such year more than 50 percent in value of the
outstanding capital stock of the corporation, the personal
holding company tax for such year may be assessed, or a
proceeding in court for the collection of such tax may be
begun without assessment, at any time within 6 years after
the return for such year was filed. (g) Certain income tax returns of corporations (1) Trusts or partnerships If a taxpayer determines in good faith that it is a trust
or partnership and files a return as such under subtitle A,
and if such taxpayer is thereafter held to be a corporation
for the taxable year for which the return is filed, such
return shall be deemed the return of the corporation for
purposes of this section. (2) Exempt organizations If a taxpayer determines in good faith that it is an
exempt organization and files a return as such under section
6033, and if such taxpayer is thereafter held to be a
taxable organization for the taxable year for which the
return is filed, such return shall be deemed the return of
the organization for purposes of this section. (3) DISC If a corporation determines in good faith that it is a
DISC (as defined in section 992(a)) and files a return as
such under section 6011(c)(2) and if such corporation is
thereafter held to be a corporation which is not a DISC for
the taxable year for which the return is filed, such return
shall be deemed the return of a corporation which is not a
DISC for purposes of this section. (h) Net operating loss or capital loss carrybacks In the case of a deficiency attributable to the
application to the taxpayer of a net operating loss
carryback or a capital loss carryback (including
deficiencies which may be assessed pursuant to the
provisions of section 6213(b)(3)), such deficiency may be
assessed at any time before the expiration of the period
within which a deficiency for the taxable year of the net
operating loss or net capital loss which results in such
carryback may be assessed. (i) Foreign tax carrybacks In the case of a deficiency attributable to the
application to the taxpayer of a carryback under section
904(c) (relating to carryback and carryover of excess
foreign taxes) or under section 907(f) (relating to
carryback and carryover of disallowed oil and gas extraction
taxes), such deficiency may be assessed at any time before
the expiration of one year after the expiration of the
period within which a deficiency may be assessed for the
taxable year of the excess taxes described in section 904(c)
or 907(f) which result in such carryback. (j) Certain credit carrybacks (1) In general In the case of a deficiency attributable to the
application to the taxpayer of a credit carryback (including
deficiencies which may be assessed pursuant to the
provisions of section 6213(b)(3)), such deficiency may be
assessed at any time before the expiration of the period
within which a deficiency for the taxable year of the unused
credit which results in such carryback may be assessed, or
with respect to any portion of a credit carryback from a
taxable year attributable to a net operating loss carryback,
capital loss carryback, or other credit carryback from a
subsequent taxable year, at any time before the expiration
of the period within which a deficiency for such subsequent
taxable year may be assessed. (2) Credit carryback defined For purposes of this subsection, the term ''credit
carryback'' has the meaning given such term by section
6511(d)(4)(C). (k) Tentative carryback adjustment assessment period In a case where an amount has been applied, credited, or
refunded under section 6411 (relating to tentative carryback
and refund adjustments) by reason of a net operating loss
carryback, a capital loss carryback, or a credit carryback
(as defined in section 6511(d)(4)(C)) to a prior taxable
year, the period described in subsection (a) of this section
for assessing a deficiency for such prior taxable year shall
be extended to include the period described in subsection
(h) or (j), whichever is applicable; except that the amount
which may be assessed solely by reason of this subsection
shall not exceed the amount so applied, credited, or
refunded under section 6411, reduced by any amount which may
be assessed solely by reason of subsection (h) or (j), as
the case may be. (l) Special rule for chapter 42 and similar taxes (1) In general For purposes of any tax imposed by section 4912, by
chapter 42 (other than section 4940), or by section 4975,
the return referred to in this section shall be the return
filed by the private foundation, plan, trust, or other
organization (as the case may be) for the year in which the
act (or failure to act) giving rise to liability for such
tax occurred. For purposes of section 4940, such return is
the return filed by the private foundation for the taxable
year for which the tax is imposed. (2) Certain contributions to section 501(c)(3)
organizations In the case of a deficiency of tax of a private
foundation making a contribution in the manner provided in
section 4942(g)(3) (relating to certain contributions to
section 501(c)(3) organizations) attributable to the failure
of a section 501(c)(3) organization to make the distribution
prescribed by section 4942(g)(3), such deficiency may be
assessed at any time before the expiration of one year after
the expiration of the period within which a deficiency may
be assessed for the taxable year with respect to which the
contribution was made. (3) Certain set-asides described in section
4942(g)(2) In the case of a deficiency attributable to the failure
of an amount set aside by a private foundation for a
specific project to be treated as a qualifying distribution
under the provisions of section 4942(g)(2)(B)(ii), such
deficiency may be assessed at any time before the expiration
of 2 years after the expiration of the period within which a
deficiency may be assessed for the taxable year to which the
amount set aside relates. ((m) Repealed. Pub. L. 100-418,
title I, Sec. 1941(b)(2)(H), Aug. 23, 1988, 102 Stat.
1323) (n) Deficiencies attributable to election of certain
credits The period for assessing a deficiency attributable to any
election under section 40(f) or 51(j) (or any revocation
thereof) shall not expire before the date 1 year after the
date on which the Secretary is notified of such election (or
revocation). (o) Cross references (1) For period of limitations for assessment and collection
in the case of a joint income return filed after separate
returns have been filed, see section 6013(b)(3) and (4). (2) For extension of period in the case of partnership items
(as defined in section 6231(a)(3)), see section 6229. ________________________________________________________ LIMITATIONS ON COLLECTION AFTER ASSESSMENT Sec. 6502. Collection after assessment TITLE 26, Subtitle F, CHAPTER 66, Subchapter A, Sec.
6502 (a) Length of period Where the assessment of any tax imposed by this title has
been made within the period of limitation properly
applicable thereto, such tax may be collected by levy or by
a proceeding in court, but only if the levy is made or the
proceeding begun - (1) within 10 years after the assessment of the tax,
or (2) prior to the expiration of any period for collection
agreed upon in writing by the Secretary and the taxpayer
before the expiration of such 10-year period (or, if there
is a release of levy under section 6343 after such 10-year
period, then before such release). The period so agreed upon
may be extended by subsequent agreements in writing made
before the expiration of the period previously agreed upon.
If a timely proceeding in court for the collection of a tax
is commenced, the period during which such tax may be
collected by levy shall be extended and shall not expire
until the liability for the tax (or a judgment against the
taxpayer arising from such liability) is satisfied or
becomes unenforceable. (b) Date when levy is considered made The date on which a levy on property or rights to
property is made shall be the date on which the notice of
seizure provided in section 6335(a) is given. _____________________________________ TOLLING OR EXTENDING EVENTS Sec 301.6501(c)-1 Exceptions to general period of
limitations on assessment and collection. (a) False return. In the case of a false or fraudulent return with intent
to evade any tax, the tax may be assessed, or a proceeding
in court for the collection of such tax may be begun without
assessment, at any time after such false or fraudulent
return is filed. (b) Willful attempt to evade tax. In the case of a willful attempt in any manner to defeat
or evade any tax imposed by the Code (other than a tax
imposed by subtitle A or B, relating to income, estate, or
gift taxes), the tax may be assessed, or a proceeding in
court for the collection of such tax may be begun without
assessment, at any time. (c) No return. In the case of a failure to file a return, the tax may be
assessed, or a proceeding in court for the collection of
such tax may be begun without assessment, at any time after
the date prescribed for filing the return. For special rules relating to filing a return for chapter
42 and similar taxes, see sections 301.6501(n)-1,
301.6501(n)-2, and 301.6501(n)-3. (d) Extension by agreement. The time prescribed by section 6501 for the assessment of
any tax (other than the estate tax imposed by chapter 11 of
the Code) may, prior to the expiration of such time, be
extended for any period of time agreed upon in writing by
the taxpayer and the district director or an assistant
regional commissioner. The extension shall become effective
when the agreement has been executed by both parties. The
period agreed upon may be extended by subsequent agreements
in writing made before the expiration of the period
previously agreed upon. (e) Gifts subject to chapter 14 of the Internal Revenue
Code not adequately disclosed on the return. _____________________ Sec. 6503.
Suspension of running of period of limitation -STATUTE-
(a) Issuance of statutory notice of deficiency
(1) General rule
The running of the period of limitations
provided in section
6501 or 6502 (or section 6229, but only with respect to a
deficiency described in paragraph (2)(A) or (3) of section
6230(a)). (FOOTNOTE 1) on the making of assessments or the
collection by levy or a proceeding in court, in respect of any
deficiency as defined in section 6211 (relating to income,
estate, gift and certain excise taxes), shall
(after the mailing
of a notice under section 6212(a)) be suspended for the
period
during which the Secretary is prohibited from making the
assessment or from collecting by levy or a proceeding in court
(and in any event, if a proceeding in respect of the
deficiency
is placed on the docket of the Tax Court, until the decision
of
the Tax Court becomes final), and for 60 days thereafter.
(FOOTNOTE 1) So in original.
(2) Corporation joining in consolidated income tax return
If a notice under section 6212(a) in respect of a deficiency
in
tax imposed by subtitle A for any taxable year is mailed to a
corporation, the suspension of the running of the period of
limitations provided in paragraph (1) of this subsection shall
apply in the case of corporations with which such corporation
made a consolidated income tax return for such taxable year.
(b) Assets of taxpayer in control or custody of court
The period of limitations on collection after assessment
prescribed in section 6502 shall be suspended for the period
the
assets of the taxpayer are in the control or custody of the
court
in any proceeding before any court of the United States or of
any
State or of the District of Columbia, and for 6 months
thereafter.
(c) Taxpayer outside United States
The running of the period of limitations on collection after
assessment prescribed in section 6502 shall be suspended for
the
period during which the taxpayer is outside the United States
if
such period of absence is for a continuous period of at least
6
months. If the
preceding sentence applies and at the time of the
taxpayer's return to the United States the period of
limitations on
collection after assessment prescribed in section 6502 would
expire
before the expiration of 6 months from the date of his return,
such
period shall not expire before the expiration of such 6
months.
(d) Extensions of time for payment of estate tax
The running of the period of limitation for collection of any
tax
imposed by chapter 11 shall be suspended for the period of any
extension of time for payment granted under the provisions of
section 6161(a)(2) or (b)(2) or under the provisions of
section
6163 or 6166.
(e) Extensions of time for payment of tax attributable to
recoveries of foreign expropriation losses
The running of the period of limitations for collection of the
tax attributable to a recovery of a foreign expropriation loss
(within the meaning of section 6167(f)) shall be suspended for
the
period of any extension of time for payment under subsection
(a) or
(b) of section 6167.
(f) Wrongful seizure of or lien on property of third party
(1) Wrongful seizure
The running of the period under section 6502 shall be
suspended
for a period equal to the period from the date property
(including money) of a third party is wrongfully seized or
received by the Secretary to the date the Secretary returns
property pursuant to section 6343(b) or the date on which a
judgment secured pursuant to section 7426 with respect to such
property becomes final, and for 30 days thereafter.
The running
of such period shall be suspended under this paragraph only
with
respect to the amount of such assessment equal to the amount
of
money or the value of specific property returned.
(2) Wrongful lien
In the case of any assessment for which a lien was made on any
property, the running of the period under section 6502 shall
be
suspended for a period equal to the period beginning on the
date
any person becomes entitled to a certificate under section
6325(b)(4) with respect to such property and ending on the
date
which is 30 days after the earlier of -
(A) the earliest date on which the Secretary no longer holds
any amount as a deposit or bond provided under section
6325(b)(4) by reason of such deposit or bond being used to
satisfy the unpaid tax or being refunded or released; or
(B) the date that the judgment secured under section
7426(b)(5) becomes final.
The running of such period shall be suspended under this
paragraph only with respect to the amount of such assessment
equal to the value of the interest of the United States in the
property plus interest, penalties, additions to the tax, and
additional amounts attributable thereto.
(g) Suspension pending correction
The running of the periods of limitations provided in sections
6501 and 6502 on the making of assessments or the collection
by
levy or a proceeding in court in respect of any tax imposed by
chapter 42 or section 507, 4971, or 4975 shall be suspended
for any
period described in section 507(g)(2) or during which the
Secretary
has extended the time for making correction under section
4963(e).
(h) Cases under title 11 of the United States Code
The running of the period of limitations provided in section
6501
or 6502 on the making of assessments or collection shall, in a
case
under title 11 of the United States Code, be suspended for the
period during which the Secretary is prohibited by reason of
such
case from making the assessment or from collecting and -
(1) for assessment, 60 days thereafter, and
(2) for collection, 6 months thereafter.
(i) Extension of time for payment of undistributed PFIC
earnings
tax liability
The running of any period of limitations for collection of any
amount of undistributed PFIC earnings tax liability (as
defined in
section 1294(b)) shall be suspended for the period of any
extension
of time under section 1294 for payment of such amount.
(j) Extension in case of certain summonses
(1) In general
If any designated summons is issued by the Secretary to a
corporation (or to any other person to whom the corporation
has
transferred records) with respect to any return of tax by such
corporation for a taxable year (or other period) for which
such
corporation is being examined under the coordinated
examination
program (or any successor program) of the Internal Revenue
Service, the running of any period of limitations provided in
section 6501 on the assessment of such tax shall be suspended
-
(A) during any judicial enforcement period -
(i) with respect to such summons, or
(ii) with respect to any other summons which is issued
during the 30-day period which begins on the date on which
such designated summons is issued and which relates to the
same return as such designated summons, and
(B) if the court in any proceeding referred to in paragraph
(3) requires any compliance with a summons referred to in
subparagraph (A), during the 120-day period beginning with the
1st day after the close of the suspension under subparagraph
(A).
If subparagraph (B) does not apply, such period shall in no
event
expire before the 60th day after the close of the suspension
under subparagraph (A).
(2) Designated summons
For purposes of this subsection -
(A) In general
The term ''designated summons'' means any summons issued for
purposes of determining the amount of any tax imposed by this
title if -
(i) the issuance of such summons is preceded by a review of
such issuance by the regional counsel of the Office of Chief
Counsel for the region in which the examination of the
corporation is being conducted,
(ii) such summons is issued at least 60 days before the day
on which the period prescribed in section 6501 for the
assessment of such tax expires (determined with regard to
extensions), and
(iii) such summons clearly states that it is a designated
summons for purposes of this subsection.
(B) Limitation
A summons which relates to any return shall not be treated as
a designated summons if a prior summons which relates to such
return was treated as a designated summons for purposes of
this
subsection.
(3) Judicial enforcement period
For purposes of this subsection, the term ''judicial
enforcement period'' means, with respect to any summons, the
period -
(A) which begins on the day on which a court proceeding with
respect to such summons is brought, and
(B) which ends on the day on which there is a final
resolution as to the summoned person's response to such
summons.
(k) Cross references
For suspension in case of -
(1) Deficiency dividends of a personal holding company, see
section 547(f).
(2) Receiverships, see subchapter B of chapter 70.
(3) Claims against transferees and fiduciaries, see chapter
71.
(4) Income tax return preparers, see section 6694(c)(3).
(5) Deficiency dividends in the case of a regulated
investment company or a real estate investment trust, see
section 860(h).
ON COLLECTION OF TAX