Will I Get IRS Tax Debt Forgiveness After 10 Years?

Tax debt forgiveness after 10 years Tax Relief Helpers

Short on Time? Here’s a quick summary of what’s ahead: 

If you have IRS tax debt you can’t afford to pay, you’ll no doubt have been trying to find out what your options are.

You may have come across something called the “IRS 10-year statute of limitations on collections”, and be wondering… 

If you can’t (or don’t) pay your back taxes, will the IRS forgive your tax debt after 10 years

The short answer is yes. Technically, if the IRS hasn’t collected your tax debt within 10 years, it legally loses the right to enforce collection and your debt will be “forgiven” or wiped clean. 

However, the reality is it’s nowhere near this simple. Plus, the IRS will not let the 10-year period pass without doing everything it can to collect your debt. 

If you have a tax debt you can’t pay, there are many other (better) options than trying to wait out this 10-year statute of limitations – and the best way to explore these options is to call Tax Relief Helpers for expert advice and help based on your unique circumstances

However, we’ll explain more about the IRS statute of limitations on collections below, including the circumstances in which your IRS debt might be forgiven after 10 years, as well as outlining your other options. 

Does IRS debt go away after 10 years?

Officially, yes. There is a statute of limitations for IRS collections, which is 10 years. 

This means that the IRS legally has 10 years to collect your tax debt. Once this statutory period – called the Collection Statute Expiration Date (CSED) – expires, it can no longer attempt to collect any unpaid debt and must instead write it off. 

However, while this can provide a glimmer of hope in certain situations, generally speaking it is not recommended to try and wait it out, as it’s highly unlikely you’ll achieve tax debt forgiveness after 10 years

Bear in mind that the IRS exists solely in order to enforce and collect taxes. It will therefore do everything in its power throughout that 10-year period to collect the tax you owe – including wage garnishments, placing levies and liens on your assets, and more. These efforts will also be ramped up the closer it gets to the end of the statute period. And don’t forget you’ll also be accumulating significant interest and penalty charges throughout the entire period, which will make your total debt even larger.

If you owe back taxes that you are struggling to pay, the IRS offers lots of different options for you to resolve your debt in a manageable way. Working with an expert tax relief firm like Tax Relief Helpers is the best way to understand your options and navigate this complicated and stressful process. Contact us to arrange a free introductory meeting and let us show you the best way out of your tax debt burden

When does the 10-year statute of limitations for IRS collections start?

The 10-year clock on your Collection Statute Expiration Date (CSED) starts from the date your taxes are assessed. However, this in itself can cause confusion as the assessment date is considered the latter of one of two dates: the date your return was due, or the date you filed your return. 

So, for example, if your 2021 tax return was due on April 15, 2022 and: 

  • you filed on the due date or before, your CSED is based on the due date, so would be April 15, 2032.
  • you filed late (including by official extension) or filed an amendment, e.g. on July 15 2023, your CSED is based on the filing date, so would be July 15 2033.

This means that filing late in the hopes of reducing this 10-year period to have a better chance of achieving tax debt forgiveness after the statutory period doesn’t work. 

Can the IRS lift the 10-year statute of limitations?

No, the statute of limitations is a legally defined period that the IRS cannot simply increase or extend without reason. 

However, there are a number of actions that cause the clock to be paused on the CSED (known as “tolling the statute of limitations”), which can then extend the total period beyond the 10 years. 

These include: 

In all these cases, the IRS will hit pause on the clock while it reviews your request or the event is in action, restarting it once resolved or no longer relevant, along with a formal extension to the original CSED.

If you enter an installment agreement with the IRS, you may also be required to sign a voluntary waiver of the statute of limitations (or a formal extension of the CSED) for the debt in question, i.e. to match the duration of the agreed payment plan. 

What’s the likelihood of getting tax debt forgiveness after 10 years?

The only circumstance in which you are likely to be granted tax debt forgiveness after 10 years, is if you are granted Currently Not Collectible (CNC) Status

Currently Not Collectible status is given by the IRS when you can prove that you are in sufficient financial hardship as to not be in a position to pay any of your tax debt without it severely affecting your ability to live. 

The IRS must then stop all collection actions, including the accrual of interest and penalties, until your financial situation improves. In this instance – and only in this instance – the clock on the statute of limitations for collections keeps on ticking, but the IRS cannot attempt to collect your tax debt. 

Once you have CNC status, you still have to submit annual returns and your status will be reviewed regularly by the IRS. If at any point your financial situation changes, the status may be revoked and your back taxes will become due again. However, if your circumstances don’t change within the 10-year period and you remain with CNC status, your tax debt will be forgiven. 

Applying for Currently Not Collectible status is a highly complex process, and one that should be done with the help of a tax expert for the best likelihood of a successful outcome

If you think this may be an option for you, contact us here at Tax Relief Helpers and let us help you navigate this important tax relief process. 

What is the IRS 6-year statute of limitations?

This is a different statute of limitations, unrelated to the IRS collection process. 

There are three main types of statutes of limitations with the IRS: 

  • Time the IRS can assess tax (normally 3 years, sometimes 6)
  • Time the IRS can collect tax (10 years)
  • Time you can claim a credit or refund (3 years)

The 6-year statute of limitations relates to the time the IRS has to assess tax. 

Normally, this is 3 years. But if there is a substantial omission on your tax return, of more than 25% of your gross income, this period increases from 3 years to 6 years. 

It’s also worth noting that there is no statute of limitations at all on the amount of time the IRS can assess tax in the case of false, fraudulent, or missing returns. 

The 10-year statute of limitations the IRS has to collect tax is then based on the latest date the tax return in question was assessed. 

What other options are there if I can’t pay my IRS tax debt?

While waiting it out and hoping your IRS tax debt will go away may be tempting, the reality is that it’s highly unlikely you’ll achieve complete tax debt forgiveness after 10 years. 

The IRS will not let the 10 years pass easily, and you’re almost guaranteed to end up in a worse situation than before if you continue to ignore their attempts at collecting the debt. 

However, there are plenty of other options available for settling your back taxes with the IRS in a manageable way – from agreeing installment plans, to negotiating a reduction to your total debt, or potentially even gaining Currently Not Collectible status.

We know how confusing, overwhelming, and intimidating facing your tax debt problems with the IRS can be, but it doesn’t need to be. 

At Tax Relief Helpers, we can walk you through all your options in an easy-to-understand way, help you find the best solution, speak to the IRS on your behalf, and negotiate settlements that will save you considerable amounts of time, money, and stress. 

Don’t spend 10 years with the burden of a spiraling tax debt weighing you down. Contact us today for a free, no obligation introductory meeting, and let us help you take control of your tax debt