The Collection Statute Expiration Date (CSED) marks the end of the collection period, the time period established by law for the IRS to collect taxes. The CSED is normally ten years from the date of the assessment.
Tax assessments with their own Collection Statute Expiration Date include but are not limited to:
- Original tax assessments from voluntarily filed returns
- Tax assessments arising from amended return filings
- Substitute for Return tax assessments made by the IRS
- Audit assessments
- Civil penalty assessments
The IRS’s Time to Collect can be Suspended and/or Extended
The initial ten-year CSED can be pushed out or prolonged by certain events.
The CSED collection period is generally suspended when the IRS is prohibited from collecting tax. The time the IRS can collect is pushed out by the period it is suspended. In other words, the initial ten-year limit to collect is no more than the original ten-years. The IRS generally doesn’t take levy action during the time the collection period is suspended, but there are some exceptions.
In contrast, the collection period is extended when the IRS is legally authorized a specific amount of time be added to the initial ten-years to collect. The IRS is not prohibited or stopped from collecting when the collection period is extended.
Suspending and extending the collection period both delay the CSED.
Common Events That Can Impact the CSED
A variety of laws affect the CSED. More than one action can suspend the running of the collection period. However, overlapping situations run simultaneously; the time for multiple events is not added more than once where one event may overlap another.
If you request an Installment Agreement (IA), the time the request is pending pushes out, or suspends the running of, the initial ten-year collection period. An IA request is often pending until it can be reviewed, and an IA is established, or the request is withdrawn or rejected. If the requested IA is rejected, the running of the collection period is suspended for 30 days. Similarly, if you default on your IA payments and the IRS proposes to terminate the IA, the running of the collection period is suspended for 30 days. Last, if you exercise your right to appeal either an IA rejection or termination, the running of collection period is suspended by the time the appeal is pending to the date the appealed decision becomes final. Refer to Topic 202.
If you file for Bankruptcy, the running of the collection period is suspended during the time the bankruptcy is pending. Generally, a bankruptcy is pending from the time a petition is filed to the date the bankruptcy is discharged, dismissed, or closed. Further, the running of the collection period is extended for an additional 6 months upon the conclusion of the bankruptcy. Refer to Publication 908.
If you submit an Offer in Compromise (OIC), the running of the collection period is suspended from the date the offer is pending to the date the offer is accepted, returned, withdrawn, or rejected. If your Offer is rejected, the collection period is suspended for an additional 30 days and, if you file an appeal of the rejection, during the period the appeal is pending. Refer to Topic 204.
If you request a Collection Due Process (CDP) hearing, the running of the collection period is suspended from the date the IRS receives the CDP request to the date the taxpayer withdraws the request or the date the CDP determination becomes final, including any court appeals. If less than 90 days until the CSED remains when the determination becomes final, the collection period is extended to 90 days from the date of the final determination. Refer to Publication 1660.
If you file an Innocent Spouse claim, then only the running of the requesting spouse’s collection period is suspended from the date the Innocent Spouse Claim was filed until the earlier of the date a waiver is filed, or until the expiration of the 90-day period for petitioning tax court, or if tax court is petitioned, the date the tax court decision becomes final, plus, in each instance, the collection period is extended an additional 60-days. Refer to Topic 205.
When a specific collection period ends, the IRS may not initiate administrative or judicial collection of the assessed debt.
