When most people hear the phrase “statute of limitations,” they think of criminal cases or personal injury lawsuits. But the IRS has its own set of time limits that govern how long it can audit your return, how long it has to collect a debt, and how long you have to claim a refund. These deadlines are written into federal law — and in some situations, they can work significantly in your favor.
Understanding how IRS statutes of limitations work won’t make your tax debt disappear overnight. But it can absolutely change the strategy your tax professional uses to resolve your case — and sometimes, it changes everything.
There Are Three Separate Statutes of Limitations You Need to Know
The IRS operates under three distinct time limits, each governing a different part of the tax process. Confusing them is common, but they serve very different purposes.
1. The Assessment Statute: How Long Can the IRS Audit You?
The IRS generally has three years from the date you filed your return to assess additional taxes against you. This is called the Assessment Statute of Limitations, and it’s the one most people think of when they wonder whether the IRS can still come after them for an old return.
If you filed your 2019 tax return on April 15, 2020, the IRS typically had until April 15, 2023 to audit it and assess any additional tax. After that date, the assessment statute expires and the IRS can no longer change what you owe for that year — even if they find a mistake later.
However, there are important exceptions that extend this window significantly:
Six-year rule. If you omitted more than 25% of your gross income from a return, the IRS gets six years instead of three to assess additional taxes. This most commonly affects self-employed individuals or those with complex income sources who underreported significantly.
Fraud and willful evasion. If the IRS believes you filed a fraudulent return or willfully attempted to evade taxes, there is no statute of limitations at all. The IRS can go back as far as they want. This is an extreme exception, but it’s real.
Unfiled returns. This one catches a lot of people off guard. If you never filed a return for a given year, the three-year clock never starts. The IRS can assess tax for that year indefinitely until you file. This is one of the most compelling reasons to file even years-old returns — it starts the clock.
2. The Collection Statute: How Long Can the IRS Collect From You?
This is the one that most directly affects people who already have an assessed tax debt. Once the IRS has formally assessed a tax liability, they generally have 10 years from the date of assessment to collect it. This is called the Collection Statute Expiration Date, or CSED.
After the CSED passes, the IRS loses its legal authority to collect that debt. The balance is essentially wiped out — you no longer owe it, at least not to the IRS. For someone carrying an old, large tax debt, this can be genuinely life-changing news.
But — and this is a big but — several things can pause or extend the CSED clock, including filing for bankruptcy, submitting an Offer in Compromise, requesting a Collection Due Process hearing, living outside the United States for an extended period, and entering into certain installment agreements.
Every time one of these events occurs, the clock stops running for the duration of that event, and in some cases additional time is added on the back end. This is why pulling your IRS transcripts and calculating the true CSED for each tax year requires careful analysis. A professional who knows what they’re looking at can identify exactly where you stand — and whether the expiration date is closer than you think.
3. The Refund Statute: How Long Do You Have to Claim a Refund?
This one works in the opposite direction — it’s a deadline that protects the government’s money, not yours. If you overpaid taxes in a given year and are owed a refund, you have three years from the original filing deadline for that year to claim it.
If you filed your 2020 return late — say in 2023 — and are owed a refund, you generally only have until the original 2020 deadline plus three years to claim it. Wait too long and the refund is gone, turned over permanently to the U.S. Treasury.
This matters especially for people with unfiled returns who may actually be owed money. Getting those returns filed as quickly as possible isn’t just about avoiding penalties — it’s about making sure you collect what’s rightfully yours before the window closes.
Can the CSED Really Be Used as a Strategy?
Yes — but carefully, and only with professional guidance. In some cases, when a taxpayer has a debt that is relatively close to the CSED expiration, a tax professional might advise a strategy of placing the account in Currently Not Collectible status or another holding pattern to allow the clock to continue running, rather than entering into a payment plan that might extend the statute.
This sounds straightforward, but it requires a nuanced analysis. Entering into an installment agreement, for example, doesn’t automatically toll (pause) the CSED — but submitting an OIC does. Knowing the difference and timing decisions accordingly can make a significant difference in outcome.
It also requires being comfortable with the IRS potentially taking collection action during the waiting period, which is why this strategy isn’t right for everyone. Someone with significant assets that could be levied, or whose passport could be revoked, needs to weigh that risk carefully.
How Do You Find Out Where You Stand?
The starting point is your IRS transcripts. The Tax Account Transcript for each year will show the original assessment date, and a knowledgeable tax professional can then account for any tolling events to calculate the true CSED. This analysis is one of the first things we do at Brightside Tax Relief when a new client comes in with multiple years of tax debt.
From there, we can tell you exactly how much time the IRS has left to collect on each year, which years are most urgent, and whether the expiration date factors meaningfully into your overall resolution strategy.
A Word of Caution
Some taxpayers, after learning about the CSED, decide to simply wait it out on their own — avoiding IRS contact and hoping the clock runs out. This is an extremely risky approach. The IRS can and will take collection action during the statute period, including levying bank accounts, garnishing wages, and filing liens. Ignoring the IRS while waiting for the statute to expire often results in significant financial damage long before the expiration date arrives.
The statute of limitations is a legal tool, not a loophole — and it works best when it’s part of a comprehensive, professionally managed resolution strategy rather than a DIY waiting game.
The Bottom Line
IRS statutes of limitations are real, they’re written into law, and they genuinely affect your options when it comes to resolving tax debt. The three-year assessment window, the 10-year collection statute, and the three-year refund deadline each play a role in shaping what the IRS can and can’t do — and what you should do in response.
If you have old tax debt and you’re not sure where the clock stands, that’s exactly the kind of analysis we specialize in at Brightside Tax Relief. We’ll pull your transcripts, calculate your statutes, and give you a clear picture of your situation and your options.
Call us today at 844-638-0800 or visit brightsidetaxrelief.com. Time matters more than you might think — let’s make sure it’s working in your favor.
The information in this article is for general educational purposes only and does not constitute legal or tax advice. Every tax situation is unique. Contact a qualified tax professional for guidance specific to your circumstances.
