Does the IRS forgive tax debt after 10 years? Sort Of

Does the IRS forgive tax debt after 10 years?

The IRS generally has 10 years to collect on a tax debt before it expires. It’s not exactly forgiveness, but similar. The day the tax debt expires is often referred to as the Collection Statute Expiration Date, or CSED. Some tax debts will expire 10 years after assessment. It’s really more of expiration than forgiveness.

The 10 years starts once the tax debt is assessed, but there are things that can extend that statute. Filing an Offer In Compromise or having a bankruptcy are common things that will extend the statute.

Some tax relief companies may ignore the CSED.  They will still file an Offer In compromise when it is not the optimal strategy. When your tax debt is close to expiring, sometimes filing a Currently Not Collectible request or entering into a minimal payment plan is a better strategy, but it depends on the case. Both of those are easier than an Offer In Compromise but do not garner as high of a fee for the company.

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Robert Kayvon, Esq.

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