What Taxpayers Must Know About the IRS 10 Year Statute of Limitations

Is Owing The Irs Money A Bad Thing? Not Necessarily

“It can feel nice to get a chunk of change, but that’s your money that you didn’t have throughout the year,” Smith said. It can feel nice to get a chunk of change, but that’s your money that you didn’t have throughout the year. For example, you can have 10% of your unemployment benefits Is Owing The Irs Money A Bad Thing? Not Necessarily withheld for taxes. That may hurt a little now, but it’s a whole lot less painful than a big tax bill next spring. If you have simple changes to your return, such as fewer dependents, you can enter the changes in this section and TaxAct will determine how you should file.

Is Owing The Irs Money A Bad Thing? Not Necessarily

The “not collectable” status is temporary, and the IRS will tell you when you’re expected to pay. The advantage is the distinction puts a hold on tax levies, wage garnishments and liens on your property. You can’t apply for a compromise if you have an open bankruptcy filing. If you are accepted into a compromise agreement, you will have two years to settle your tax debt. By submitting a form, you will be directed to the website of one of our affiliates who specializes in tax debt. We receive a fixed marketing fee for providing this service.

Why Do I Owe Taxes To The IRS & How To Avoid Them

Revenue officers are IRS employees who collect tax debt, usually when you owe large amounts of back taxes, owe for continuous years, and/or have unfiled back tax returns. You’ll want to comply with all your revenue officer’s requests by the deadline, because they have the authority and the duty to quickly enforce back tax issues by filing liens and issuing levies. Other taxpayers may simply misunderstand the tax laws and take exemptions, deductions, and credits that they are not qualified to claim. In this situation, the IRS will usually contact the taxpayer and inform them of the reporting error.

If the Department determines that your Claim was not filed within the statute of limitations, your refund request will be denied and the Department will issue a Notice of Denied Refund. If you disagree with the Department’s determination, you may file a petition for a contested tax case at the Office of Administrative Hearings (“OAH”). If you elect to file a petition with OAH and it is finally determined that the Claim was not barred by the statute of limitations, the case will be returned to the Department for further consideration.


When the statute of limitations expires, the IRS may not notify taxpayers. That must be tracked by taxpayers themselves or their tax relief professional. Also, it is their own responsibility to obtain documentation from the IRS that the tax debt no longer exists.

  • “It was either $3,000 for children under 18 or $3,600 for kids under 6 years old.”
  • If you’re financially capable, paying off the debt improves your chances.
  • That means you were shorted on $200 of earnings per month throughout 2019.
  • Despite what you may have heard, in the United States, no one goes to jail for simply failing to pay their taxes.
  • “People should absolutely expect smaller tax refunds this year. And frankly, some people might even owe the government money,” financial expert Lynnette Khalfani-Cox told NPR at the start of filing season.
  • If you do not like the way you are being treated by an IRS representative, you can stop the interview and ask to speak with a supervisor.
  • Fortunately, most tax relief professionals like Landmark Tax Group provide confidential consultations prior to full-on representation.

The date on which the IRS has to forgo a taxpayer’s debt, 10 years from when the penalty was assessed. When the Department and you agree that an action by the Department resolves your objection, the Department does not need to take further action and the Department will close the Departmental review. Otherwise, the Department must schedule a conference with you. If a conference is necessary, the Department will set the time and date and notify you at least 30 days prior to the date for the conference. The date set for the conference may be changed by mutual agreement.


We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, pleasecontact an attorney https://quick-bookkeeping.net/ in your area. Montana happens to be home to the greatest number of filers who owed nothing and received nothing in return from the IRS.

More self-employed deductions based on the median amount of expenses found by TurboTax Premium customers who synced accounts, imported and categorized transactions compared to manual entry. If you find yourself in a tax mess, a RamseyTrusted tax pro—like one of our Endorsed Local Providers or national providers—can help you straighten out your tax situation. These tax experts know their stuff and are vetted by the Ramsey Solutions team, which is why you can count on them to get the job done. You’ll do just about anything not to have the feeling of owing taxes at the end of the year, right? Well, the great news is, fixing your taxes isn’t as difficult as you might think. You just need to do a little bit of math and fill out a new W-4.

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