Navigating IRS Collections and Your Tax Refund Rights

Even the IRS has collection tax limits

Navigating the IRS (Internal Revenue Service) collections and understanding your rights as a taxpayer is crucial for managing your financials effectively. The IRS collection practices, statutes of limitations, and the process for claiming tax refunds.

IRS Collection Practices

The IRS employs several methods to collect unpaid taxes, ranging from notices and liens to levies and property seizures. Here’s an overview:

1. Notice and Demand: The IRS typically sends a notice outlining the amount owed and the due date for payment.
2. Liens: If taxes remain unpaid, the IRS may place a lien on your property as a legal claim to secure the debt.
3. Levies: In severe cases of non-payment, the IRS may issue a levy to seize assets like wages, bank accounts, or property.
4. Seizures: As a last resort, the IRS can seize and sell property to settle unpaid taxes.

Statute of Limitations on Collection

The IRS is bound by statutes of limitations that dictate how long they can legally pursue tax collections:

• 10-Year Rule: Generally, the IRS has up to 10 years from the date of assessment (usually the filing date of your tax return) to collect unpaid taxes. After this period, they cannot pursue further collection actions.
• Exceptions: Certain events, such as bankruptcy filings or requests for installment agreements, can extend the collection period beyond the initial 10 years.

Claiming Your Tax Refund

On the flip side, taxpayers also have rights when it comes to claiming tax refunds:

• Three-Year Limit: You generally have up to three years from the due date of your tax return (including extensions) to claim a refund. For example, if your 2023 tax return was due on April 15, 2024, you have until April 15, 2027, to claim any refund owed for that year.
• Late Filers: If you filed a tax return after the due date, your three-year period begins from the date you actually filed the return.

IRS Publications and Resources

For more detailed information on IRS collection practices, statutes of limitations, and claiming tax refunds, you can refer to IRS publications:

• IRS Publication 594, The IRS Collection Process: Provides an overview of the IRS collection process, including notices, liens, and levies.
• IRS Publication 556, Examination of Returns: Covers the examination process, your rights as a taxpayer, and procedures for claiming refunds.

If you’re struggling with IRS debt you could qualify for an offer in compromise. The (OIC) is a program allows qualifying taxpayers to settle their tax debts for less than the full amount owed. It’s a complex process best navigated with professional guidance. In order, to ensure eligibility of acceptance by the IRS contact us to see if you qualify.

Advocating for Change

Moreover, if you believe changes are needed to the current tax laws or regulations, including the statute of limitations on tax collection or refund claims, consider contacting your congressional representatives. They can introduce legislation or support reforms that address taxpayer concerns.

Write to Your Congressman

To voice your support for changes to extending the statute of limitations on refund claims you can write to your congressman or congresswoman. They represent your interests in Congress and can advocate for reforms that benefit taxpayers.

Click here to find your congressional representative and send them a message advocating for changes in tax policies.

Conclusion

Meanwhile, understanding the IRS collection practices & your rights regarding tax refunds is essential for navigating your taxes effectively. Nevertheless, staying informed & proactive, you can manage your taxes & advocate for changes. Lastly, we strongly suggest you consider reaching out to your congressional representatives to support meaningful reforms.