STATUTES OF LIMITATIONS
ON COLLECTION OF TAX

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.

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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.

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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.

 

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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).

 

 

 
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