How to Qualify for IRS Tax Debt Forgiveness After 10 Years
Many people wonder if the IRS will forgive their tax debt after 10 years. The answer is not so simple, but there is some truth to this idea. In this blog post, we will explain what the IRS 10-year rule is, how it works, and what you can do to avoid or reduce your tax debt.
The IRS 10-year rule is also known as the Collection Statute Expiration Date (CSED). It refers to the amount of time that the IRS has to collect on a tax debt before it expires. The CSED is usually 10 years from the date that the IRS assessed the tax liability, but it can vary depending on certain factors, such as:
- Filing an offer in compromise
- Requesting a collection due process hearing
- Filing for bankruptcy
- Applying for innocent spouse relief
- Living outside the U.S. for at least six months
These actions can pause or extend the CSED, giving the IRS more time to collect on your tax debt. However, once the CSED expires, the IRS cannot legally pursue you for the unpaid taxes. This means that you are no longer liable for the tax debt and the IRS will stop any collection actions against you, such as levies, liens, or garnishments.
However, this does not mean that you should ignore your tax debt and wait for it to expire. The IRS 10-year rule is not a guarantee that your tax debt will be forgiven. There are several reasons why you should try to resolve your tax debt as soon as possible, such as:
- The IRS can still charge you interest and penalties on your tax debt until it expires, which can significantly increase the amount you owe.
- The IRS can still file a tax lien against your property, which can affect your credit score and your ability to sell or refinance your property.
- The IRS can still seize your state tax refunds or other federal payments, such as Social Security benefits or stimulus checks.
- The IRS can still audit you and assess additional taxes, which can restart or extend the CSED.
- The IRS can still sue you in court and obtain a judgment against you, which can extend the CSED indefinitely.
Therefore, it is in your best interest to seek professional help from a qualified tax resolution firm that can help you negotiate with the IRS and find the best solution for your situation. There are many options available to settle your tax debt for less than what you owe, such as:
– An installment agreement, which allows you to pay your tax debt in monthly installments that fit your budget.
– An offer in compromise, which allows you to settle your tax debt for a lump sum that is less than what you owe.
– A currently not collectible status, which allows you to temporarily stop paying your tax debt until your financial situation improves.
– A penalty abatement, which allows you to reduce or eliminate some of the penalties that have been added to your tax debt.
If you are struggling with tax debt and want to know if you qualify for any of these options, contact us today for a free consultation. We have a team of experienced tax professionals who can help you understand your rights and options and guide you through every step of the process. Don’t let your tax debt ruin your life. Let us help you get out of debt and get peace of mind.