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It’s Been So Long. Do We Still Owe the IRS? – Sam

“Dear Jim,

The IRS is still trying to collect $15,000 from 2000. We were in Chapter 13 in ’08-’10 and the BK was DISMISSED in Dec. ’10. In Oct. of 2011 we began making monthly payments of $50. These payments are toward the $15,000 and $640.00 assesed for 2009.

Do we still owe the $15k? We entered the agreement AFTER the Statute of Limitations ran out after Chapter 13. We did so to stop the harrasing phone calls from the IRS. They are now informing us that the payment plan will continue for the next year. We have signed nothing to renew this plan. If we don’t owe it how should we stop paying and have all the $50 payment made last year applied toward the $640.00?

Thanks for any advise.

Sam”

Hi Sam:

It appears that you have a dispute with the IRS on what is the collection statute of limitations. Normally, the collection statute (CSED) is 10 years from the DATE OF ASSESSMENT (for a timely filed 2000 return, i.e. filed on 4/15/2001, the date would be 4/15/2011). However, the IRS will extend the statute for various reasons (examples are time you are in bankruptcy, an offer in compromise, filed a Taxpayer assistance order, out of the country, etc.).

It is important to correctly calculate your CSED. It starts with getting the IRS calculation of your CSED. You can call the IRS Collection phone number (1-800-829-7650) or visit your local IRS office. Ask to speak with someone who has knowledge in computing your collection statute (probably a “Revenue Officer”).

If your CSED has expired, the IRS will make corrections on your installment payments. Keep in mind, if you have tried asking the IRS and have not received an answer, you should go to your local taxpayer advocate and request assistance.

Thanks

Jim Buttonow is one of the resident debt experts here at GetOutOfDebt.org that helps people for free. Jim is a licensed CPA who spent 19 years with the IRS coordinating large compliance teams of IRS agents and specialized personnel. In the last 5 years, Jim has invented consumer and practitioner software and treatises on how to address many different tax issues. He has also represented many people before the IRS examination, collection, filing, and appeals functions. He currently assists taxpayers on an active pro bono tax practice aimed at serving people in need. He can be reached at IRSMind.com.

If you have a tax question you’d like to ask just use the online form. I’m happy to help you totally for free.

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About the author

Jim Buttonnow

Jim Buttonow, CPA/CITP, practices in the area of IRS and State tax controversy. He has more than 29 years of experience in IRS practice and procedure. Reach Jim at [email protected] or through his website www.buttonowcpa.com

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