How long can the federal government collect on back taxes?

Answer 1

This is more a "generally" answer than specific to any tax...although most have their own specifics, the generalities remain the same.

There are many SOLs..ones for reviewing return, ones for assesing the tax, and ones for collecting the tax assessed. Together than can make for a long time under any circumstances.

The SOLs are different for each type of tax.

For individuals on income tax, the first is generally 3 years from when you filed the return.

If there is a gross understatement of tax (25% or more), then the statute is 6 years.

There is no statute if fraud is involved. (Fraud can sometimes be considered by intentionally not paying any amount, especially over 25%, without any real legal support.

MOST IMPORTANT: The Statutes don't even start to run until a return is filed. (Didn't file, always open...no SOL argument available).

The way the time is counted gets complex. Many things toll (means stops) the running/counting of time...like the Govt sending a letter (responded to or claimed to have been received or not to what is/was your last known address with that Department), negotiating, etc. Generally holidays and such don't count either.

Commonly, a jeopardy assesment is issued before the SOL for assessment runs out. Specifically allowed by law if the Govt feels it is at "jeopardy" of losing out. These assessments are obviously very high and actually change your legal position as they are given the "presumption of correctness" and become what you then have to prove inaccurate by specific amounts.....rather than the Govt having to prove your return inaccurate.