The IRS Statute of Limitations is a legal time limit that restricts the amount of time the IRS has to audit, assess, or collect taxes from you. This means that if the IRS fails to take action within the specified time period, you may be released from your tax liability. IRS Statute of Limitations can provide relief for individuals and businesses struggling with tax debt.

How IRS Statute of Limitations Works

The IRS Statute of Limitations varies depending on the type of tax and the circumstances. Generally, the IRS has:

• Three years to audit and assess individual tax returns (Form 1040)
• Three years to audit and assess business tax returns (Form 1120, Form 1120S)
• Ten years to collect taxes owed

Consequences of Ignoring IRS Statute of Limitations

Failing to understand and utilize the IRS Statute of Limitations can result in:

• Extended tax debt and liability
• Increased penalties and interest
• Continued collection actions, including levies and seizures
• Even criminal charges in extreme cases