The Collection Statute Expiration Date (CSED) marks the end of the period during which the IRS may legally collect assessed taxes. In most cases, and absent complicating factors, the CSED is 10 years from the date the tax is assessed.
Certain tax assessments, however, carry their own CSED timelines. According to the IRS, these include the following:
Assessments stemming from amended tax returns
Assessments made by the IRS when it creates a Substitute for Return (SFR)
Tax assessments from voluntarily filed returns
To determine which CSED applies, you can review your tax transcript online or request a copy by mail. The applicable CSED code can appear in the transaction section of the transcript.
While the CSED generally runs for a fixed period, certain actions and circumstances can suspend or extend the collection window. During periods of suspension, the IRS is typically unable to pursue collection activity.
Events that may suspend or extend the CSED include bankruptcy filings, Innocent Spouse claims, requests for a Collection Due Process hearing, and submission of an Offer in Compromise. The length of any suspension varies depending on the event. Other circumstances that may affect the CSED include residing outside the U.S., military service, or deployment to a combat zone.
The CSED operates differently when a return is not filed or when fraud is involved. Returning to the earlier example of misstated expenses, questions often arise about how long the IRS may pursue collection when a return contains fraudulent information. In cases involving fraudulent returns, there is no statute of limitations on collection. The IRS may pursue taxes, penalties, and interest indefinitely, regardless of how much time has passed since the return was filed.
A recent court decision illustrates this distinction. In that case, a taxpayer was unaware that a preparer had added false expenses to inflate refunds. Nearly 20 years later, the IRS assessed unpaid taxes totaling $65,318, along with a $13,064 penalty. Although the taxpayer did not intend to mislead the IRS, the court found that the fraudulent return eliminated any limitation period for collection. For additional context on how tax fraud is defined and evaluated, see our guide, “Understanding Tax Fraud.”
When collection activity involves questions of fraud, failure to file, or extended enforcement timelines, understanding available options becomes increasingly important. At Robert J. Fedor, Esq., L.L.C., we advise individuals and businesses facing complex IRS collection and enforcement matters. Contact our legal team at 440‑250‑9709 to discuss your situation. We serve clients in Northeast Ohio, Chicago, and New York City, as well as internationally, from our offices in Cleveland and Chicago.