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Do you owe a debt to the Internal Revenue Service (IRS)? You’re not alone. The most recent statistics suggest that well over 11 million Americans are in the same boat you are.

Nonetheless, owing money to the IRS can be intimidating. After all, most lenders have strict limitations on how they can collect their money and what they can do if collections become difficult, but the IRS isn’t like most lenders.

The IRS can garnish your wages without filing a judgment against you. It can also charge you with tax evasion — a felony that carries a penalty of up to five years in prison and $100,000 in fines. But even the government has its limitations, including the IRS 10-year statute of limitations.

The IRS Can Collect Debt for Only 10 Years

The IRS statute of limitation on collections means that the most powerful collections agency in the world can collect debts from you only for a period of 10 years. After the 10-year window closes, collection efforts must cease, and the agency must write the debt off, which means you’re free and clear.

That is, if you want to take the risk of waiting 10 years to handle your debt. The fact is that you have other options. Two of the most common options for dealing with tax debt include:

• Installment agreements: You can contact the IRS to come up with an installment agreement. The agreement allows you to make affordable monthly payments to chip away at your debt.

• Offers in compromise: If there’s no way you’ll be able to pay your IRS debt in full, or if doing so would result in financial hardship, you may qualify for an offer in compromise. Under the offer-in-compromise program, the IRS may agree to waive a percentage of the amount you owe. You can pay the remaining amount in monthly installments or as a lump sum. The key is making an offer that’s in line with the highest amount of money the IRS would be able to collect in a reasonable amount of time.

When Does the 10-Year Clock Start?

When you hear about the IRS 10-year statute of limitations, it’s easy to fall for the misconception that the clock starts as soon as you earn the money or report your income to the agency.

However, the 10-year clock doesn’t start until the summary record of assessment.

When you file your annual tax return and owe money to the IRS, you’ll eventually receive a bill in response. The IRS lists the record date of assessment on the bill.

So if you have tax debt related to money you earned in 2013, you may not be out of the woods yet. If you want to know exactly when your 10-year clock started but don’t have a bill from the IRS handy, you’ll need to contact the agency and ask for the date of the summary record of assessment on your debt. Collections can take place for up to 10 years from that date.

What Extends the IRS Statute of Limitations?

Taxes can be a complex topic, and what seems straightforward isn’t always as simple as you think. For example, although there is a 10-year statute of limitations on IRS collections, there are a few things that can stop the clock, giving the agency more time to collect a tax debt.

The most common clock-stoppers include:

• Bankruptcy: You can include your tax debt in a bankruptcy filing, but the bankruptcy could result in the IRS being able to extend its statute of limitations in terms of collecting your debt. For example, if you have only two years left on the clock and a bankruptcy court orders you to make small payments over the course of five years, the results of the bankruptcy extend the statute of limitations by three years, giving the IRS more time to collect.

• Offers in compromise: The offer-in-compromise program also hits the brakes on the IRS statute of limitations. Ultimately, if you make an offer, you have to stick to it. For example, if you have two years left on your clock and offer to make small monthly payments for three years, the offer extends the amount of time for which the IRS can collect your debt by one year.

• Appeals: You have the right to appeal decisions the IRS makes, but when you do, the 10-year clock stops during the appellate process and resumes thereafter.

• Extended international stays: When you leave the country for more than six months, the IRS 10-year statute of limitations will pause. The click resumes when you come back to the U.S.

How to Get Your Tax Debt Written Off After 10 Years

The IRS may quit collecting after 10 years, but it’s not the agency’s responsibility to tell you when it stops or provide any associated documentation. However, the IRS must release any liens after 10 years.

One of the best ways to get your hands on a lien release from the IRS is to work with tax professionals who know how to navigate the complexities of the tax code, like the team at Shurek Accounting & Tax.

IRS Debt FAQs

Albert Einstein was a strong proponent of questions and told the people around him to never stop questioning things. He also found it interesting that most people found asking questions to be uncomfortable — especially because he knew that human beings are inquisitive creatures and questions are just part of our nature.

With that said, you should never shy away from asking questions. That’s even more true when it comes to questions about topics like tax debt, which can affect both your financial stability and your freedom. So don’t be shy if you have any questions about taxes. We’ll answer some of the most commonly asked questions about the IRS 10-year statute of limitations, and tax debt in general, below.

Can I Go to Jail If I Don’t Pay My Taxes?

Yes, but it’s highly unlikely. There are more than 11 million people in the U.S. who owe back taxes to the IRS, and while courts convict several hundred people for tax evasion each year, that amounts to less than 1% debtors who go to jail for not paying their taxes, and for good reason.

The IRS ultimately wants to collect the money you owe. The agency knows that if you’re in jail, you can’t work, which means it won’t be able to collect. So the agency does everything in its power to collect its money without jeopardizing your freedom.

Can the IRS Come After Me After 10 Years?

Not in most cases. The 10-year statute of limitations means the IRS cannot collect debts for a period of more than 10 years after the record date of assessment.

However, there’s a caveat to that. There are several qualifying events, such as bankruptcies, offers in compromise, and appeals, that stop the 10-year clock. If one of these events takes place, the IRS will have more than 10 years from the record date of assessment to collect past-due taxes.

Can the IRS Audit Me After 10 Years?

It’s not likely. Most IRS audits look at the last three years of your tax history. If those years are up to par or show only minor, reasonable errors, you’re in the clear; the IRS won’t usually look any further back.

On the other hand, if there are any substantial errors in your last three years of returns, the IRS may decide to look further into your tax history to make sure additional issues didn’t occur, but it still usually won’t go back more than six years.

What Should I Do If I Haven’t Filed Taxes for 10 Years?

If you haven’t filed taxes for 10 years, your best course of action is to contact a tax professional like Shurek Accounting & Tax, explain your situation, and work to clear up the mistake. It may be scary, and you may not know how much money you owe. But your tax pro and the IRS will work with you to come up with a reasonable plan for paying off your past-due taxes and help you avoid more penalties and a potential prison sentence.

Final Thoughts

The IRS is, indeed, the strongest collections agency in the world, and if you live and work in the U.S., the agency collects its cut of your paycheck regularly. However, even the most powerful collections agency in the world has to follow the rules.

If you’ve owed taxes for more than 10 years, one of those rules may be to release the lien and forgive the debt, but passively waiting to reach the 10-year finish line could be a big mistake if you’re not quite there yet.