Dec 1, 2007

Tax lien- Did you ever waive the Collection Statute?

In the 1990’s, the IRS often requested taxpayers to sign a waiver to extend the period to collect on your taxes (i.e. a Form 900). Many taxpayers, facing high payment plans, signed these waivers that extended the CSED far past the 10 years the IRS normally has to collect.

In 1998, Congress put an end to all of the waivers and also nullified many PRIOR WAIVERS!

Per the Internal Revenue Manual:

1. As of January 1, 2000, the ten-year collection statute cannot be extended unless a special situation exists, such as a levy on the taxpayer’s property, an installment agreement, or if the debt has been reduced to judgment. IRC 6502.

2. Extensions that were executed on or before December 31, 1999, may expire earlier than their original terms pursuant to a special transitional rule. An extension, requested on or before December 31, 1999, will expire on the latest of (1) the last day of the original ten-year period, (2) December 31, 2002, or (3) in the case of an extension in connection with an installment agreement, the ninetieth day after the extension. RRA 98 sec. 3461(c)(2).

Does this apply? Would you like to know?? Consult an experienced tax professional to find out.

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