Does an irs installment agreement extend the statute of limitations?

Installment Agreements For requests to extend the CSED beginning January 1, 2000 in connection with an installment agreement, the statute of limitations is suspended under IRC 6502 (a) (for the period agreed in writing by the Service and the taxpayer and for 90 days after the expiration of that period). An IRS installment agreement does not extend the period that the IRS must charge. The Internal Revenue Code also contains provisions on tolls. These are actions taken by foolish people who unnecessarily extend the statute of limitations.

For example, if you owe taxes and seek an installment agreement so that you can pay those taxes for a longer period of time, the statute of limitations is suspended or suspended while your application is pending. Because an application for an installment agreement can be reviewed by any number of IRS divisions and can be reviewed by the U.S. Department of State. UU.

Tax Court; the statute of limitations could perhaps be extended by two, three or four years. An “installment agreement” is what the IRS calls a payment plan for your tax debt. If you request it, your statute of limitations will be suspended from the time you file the request until the IRS gives you a response. Another method the IRS uses to extend the statute of limitations is to get you to accept an installment agreement.

When you establish a payment agreement with the IRS, they automatically suspend the statute of limitations and add six years to the period, making a total of 16 years, not just ten. This is due to the fact that most IRS installment agreements have a six-year duration, although this depends on many factors, such as the total amount you owe and the amount you can pay to the IRS on a monthly basis. The IRS may also impose a 10-year statute of limitations for collection if the taxpayer voluntarily agrees to extend it. The extension is generally five years.

In exceptional cases, the IRS may approve a partial installment payment agreement if the taxpayer agrees to extend the SOL for collection. If the taxpayer enters certain assets after the CSED dates, the IRS will generally request an extension of the CSED dates to approve a specific type of tax resolution agreement. The CSED ends 90 days after the expiration date of the exemption. If the IRS wants an extension of the law because the anticipated term of an installment agreement would extend it beyond the CSED, it must “ask the taxpayer to sign” a Form 900 tax collection exemption.

In connection with this, in the past, some IRS offices had an unseemly habit of terminating or threatening to rescind installment agreements simply to compel taxpayers who otherwise fully complied with legal regulations. The changes to the RRA came into effect for all installment agreements effective on December 31, 1999 and were signed thereafter, while the technical correction to the CRTRA will only take effect after December 21, 2000. The changes to §6331 (k) () had the effect of prohibiting collection by lien while a request for an installment agreement was pending, or while an agreement was in effect, or during the period after the IRS notified the taxpayer of its intention to terminate an agreement and during any appeal of that agreement agreement. Termination.

You may not be able to make any payments to the IRS (that's fine too), the IRS has a financial hardship program that places a debt in bad condition. Therefore, despite the legislative authority under the RRA to automatically extend the statute of limitations throughout the term of an installment agreement, it appears that the IRS preferred to rely on its traditional method of extending the law through signed exemption agreements. While most bankruptcies won't address your debts to the IRS, some will, so you may not end up owing that full amount to the IRS once your bankruptcy is complete. Since a request for an installment agreement can be reviewed by any number of IRS divisions and can be reviewed by the U.

In June 1998, the IRS apologized for terminating some 20,000 installment agreements for this reason and ordered the revocation of any exemption thus obtained. The effect of §6331 (k), as revised, is to extend the statute for as long as a request for an installment agreement is pending and for the time during which administrative procedures to terminate an agreement continue to be carried out, but not for the entire time the agreement is in effect. A concern that my clients frequently express is whether entering into an installment agreement with the IRS automatically extends the time the IRS has to collect. If you recently received a notice from the IRS about the back taxes you owe them, are concerned that the IRS will tell you that you owe taxes from several years ago, or have questions about the statute of limitations in general, contact the tax advisors at Enterprise Consultants Group.

The current IRS rules regarding the extension of the statute of limitations in the context of installment agreements are set out in the Internal Revenue Manual. . .

Stewart Schlageter
Stewart Schlageter

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