Are federal taxes forgiven after 10 years?

Generally speaking, the Internal Revenue Service has a maximum of ten years to collect unpaid taxes. Once that time has elapsed, the obligation is completely erased and removed from the taxpayer's account. This is considered an “amortization”. As a general rule, there is a ten-year statute of limitations for IRS collections.

This means that the IRS can attempt to collect your unpaid taxes for up to ten years from the date they were evaluated. With some important exceptions, after ten years, the IRS has to stop its collection efforts. Every year, the statute of limitations expires for thousands of taxpayers who owe money to the IRS. While all taxpayers have the right to have their tax debt forgiven after 10 years, the clock can be stopped (or “pay a toll”) temporarily.

Unfortunately, when the CSED comes forward, the time you can be collectible is extended. It has been audited by the Internal Revenue Service (IRS) and it has been determined that it owes money to the government. So, you may be thinking that you are now struggling with debt forever. However, that is not exactly the case.

While the IRS is not widely shared by the IRS, every IRS auditing tax debt has a statutory collection due date (CSED). Generally speaking, the IRS has 10 years to collect an unpaid tax debt, after which the debt is eliminated. Towards the end of the CSED, the IRS tends to be more aggressive in its collection efforts, hoping that the taxpayer will pay as much as possible before the deadline or agree to extend it. The IRS can also extend the ten-year period by suing it in federal court; however, it rarely does.

This is left up to the person or their tax professional, in addition to requesting the necessary documentation to prove that the debt no longer exists. When developing a strategy to deal with tax debt, the first thing to consider is your ability to pay it. In addition, it is your responsibility to obtain documentation from the IRS that shows that the tax debt no longer exists. The complexity of the IRS statute of limitations makes the CSED a source of confusion, and not just for taxpayers.

This is because the IRS is required by law to take enforcement action if you don't pay your taxes on time and it doesn't explain why you can't pay them. Whether you work with a professional or choose to manage your tax debt on your own, be sure to respond quickly to your letter or notice from the IRS to minimize any additional interest or penalty. But is trying to wait for this period to pass a viable strategy to resolve your tax debt? For most taxpayers, the answer is probably no, although there are certain situations where it might make a lot of sense to take this approach. Basically, every time the IRS can't actively request the collection of your tax debt, time stops.

If you're having financial difficulties and paying your tax debt simply isn't feasible due to considerable difficulties, the first option you should explore is the currently uncollectible condition. In bad times (before 1999), the IRS used to exert enormous pressure on taxpayers to agree to extend the statute of limitations beyond ten years; these extensions often lasted ten or even twenty years. During her years as an auditing representative for TaxAudit, Karen successfully defended the company's members during all federal and state auditing processes, managed cases assigned to the United States Tax Court, and developed procedures to facilitate the auditing process for taxpayers. These results do not guarantee individual results, nor are they representative of the results of other state and IRS tax resolution programs.


Stewart Schlageter
Stewart Schlageter

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