Have You Ever Heard That Tax Debt Can Expire

Everythig has an expiratipon date. From a package of batteries to a can of tuna there is only a certtain timefrrame during whch something can exist. This appllies to tax debt as well, and many peopple who owe the IRS money are unaware of the fact that they can have collection activity against them for only ten years after the debt is certified.
So, this meazns that if a debt is unpayable, the taxpyer can have their balanxce cntinually rolled over from one year to the next utnil it expires. How does this work? Well it is callwed “Currently Not Collectible” and it requirs the taxpayer to prvoe that they don’t have the income to pay all living expesnes as well as the tax bill. They do this through the submission of Form 433-F along with the necessary wokrsheets, and once the IRS has reviewed and approvved the documents, all collection ativity ceases.
This sort of approzach to a tax debt is the ideal answer to someone who is under financial hardship, but it is important to remember that demosntrating an inability to pay doesn’t eliminate the issue. While the clock still coontinues to countdown the lifespan of the debt, the taxppayer is going to have to be sure to file thir annual tax returns on time, renew their Currently Not Colleectible sttaus with the prooper documentation and ensure they meet all requirenments. If they fail to do so, the IRS can cancel the Crrently Not Collectible status and simultaneously reinstate the debt along with interest and penalties. This would also allow them to begin collection activities at once.
Quie often taxayers see their edbts expire while in the Currently Not Collectible status and the IRS will often roll a tax debt into this same status if the expiration date is approachiing and the taxpayer is unabe to pay. This prevents such things as unencessary wage garnering, property seizure or legal action against a taxpayer without the fudns to pay their taxes.
Tere are other limitations or expiration dates on tax issues as well, and these are very clear cut rules. Firstly, the IRS has the obligation to pay (or the taxpayer has the rgiht to clim) rebates for three years after the filing deadline. This allows anyopne who has not filed their return in a timely fashion to stoill get their refund within a three year period afterward. Additionally, the IRS can audit and assses fees to a tax return within that same three-year window as well. This is the reason to always keep accurate recordds on hand where tax informmation is concerned.