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Just what exactly is a Statute of Limitations? Why is it important to me? These two questions are answered in this blog. The Statute of Limitations can determine whether the Internal Revenue Service (IRS) can claim any taxes, penalties, and interest against you for past tax debts. The Statute of Limitations is the time frame mandated by law for the IRS to review, assess and/or resolve any tax related issue against you. Once this time passes, the IRS forfeits any claim for taxes, interest, penalties, and collection actions. On the flip side, the taxpayer forfeits any claim to past refunds if the Statute of Limitations expires. There are three types of Statutes of Limitations:
Be aware that the Statute of Limitations does not apply in cases whereby an individual files a fraudulent tax return, does not file a tax return for a year for which you should have filed, or attempts to evade paying taxes. In such cases, it is best to resolve these issues so that the Statute of Limitations may apply. In what situations does the Statute of Limitations help? One example pertains to the collection statute of limitations. If you receive an Offer in Compromise (OIC) for a tax debt, you may not be required to pay off your entire tax debt if the 10-year Statute of Limitations expires before you pay off the tax debt. The remaining amount of the tax debt is legally required to be forgiven. However, filing for an Offer in Compromise extends the Statute of Limitations to 10 years from the date that the OIC was filed, not from the time the tax return was filed. Likewise, this scenario can apply to Installment Agreements. It is possible that the Statute of Limitations expires before paying the entire amount. Remember that the time frame restarts to the time when the Installment Agreement was filed. In essence, the clock is restarted to the time when you file or were approved for a tax resolution option. The Statute of Limitations can work to your benefit when reviewing past tax returns. A tax professional can find a refund that you previously missed. It can also help you in resolving past tax debts in that a portion of the tax debt can be forgiven. It is best to consult with a tax professional for any tax problems help. Contact us today! The post Why Is a Statute of Limitations Important? appeared first on Bullseye Tax Relief. Via https://www.bullseyetaxrelief.com/why-is-a-statute-of-limitations-important/
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