There may be many people in California who don’t know that the IRS only has so much time to collect taxes. The statute of limitations on collecting back taxes is 10 years. After that time, taxpayers are no longer liable for the taxes, but getting to the 10 year mark can be difficult.

Not only will it be detrimental to a taxpayer’s credit score to owe money to the IRS, but it can also open a taxpayer to aggressive collection efforts, especially as the tax debt reaches the 10 year mark. In addition, there are several circumstances in which that statute of limitations can be extended that taxpayers need to know about. There are several circumstances that can add time to the 10 year statute of limitations.

Things such as filing for bankruptcy, an Offer of Compromise, or any other kind of relief available to a taxpayer can add time. This is because the IRS’s ability to collect the tax debt is stopped during these times. In response to that, there are certain amounts of time allotted back to the IRS based on how long it takes these circumstances to be completed.

It is also possible for a taxpayer to waive the statute of limitations, but this must be done in writing. California taxpayers who receive notices from the IRS that they owe back taxes may benefit from understanding all of the options available to them. First and foremost, however, every taxpayer should be careful not to waive any of their rights without first understanding exactly what that could mean.

Source: wpmaitlandobserver.com, “IRS has only 10 years to collect tax debt,” Peter Pappas, June 12, 2013