Glossary

Collection Statute Expiration Date (CSED)

The Collection Statute Expiration Date (CSED) is the date when the IRS’s ability to legally collect a tax debt expires. Under U.S. tax law, the IRS has 10 years from the date the taxes were assessed to collect the debt. Once the CSED passes, the IRS can no longer enforce collection actions, and the remaining balance is effectively forgiven.

However, certain actions can extend or pause the CSED, such as:

Filing for bankruptcy.
Submitting an Offer in Compromise (OIC).
Requesting an Installment Agreement.
Living outside the U.S. for an extended period.

Taxpayers can request their CSED date from the IRS to understand when their tax debt may expire. While the expiration of the CSED can bring relief, taxpayers should be aware that the IRS may take aggressive actions, such as filing liens or levies, before the CSED to ensure collection.

Recommendation

IRS Collection Process

The IRS collection process involves multiple stages, including notices, levies, and liens, to recover unpaid taxes from individuals and businesses.

Form 433-B: Collection Information Statement for Businesses

IRS Form 433-B is used by businesses to disclose financial details when applying for IRS payment plans or offers in compromise.

CP3219B Notice: Notice of Deficiency with Right to Petition Tax Court

IRS CP3219B Notice alerts taxpayers of a tax deficiency and provides instructions for petitioning the Tax Court to dispute the assessment.

Letter 3489: Offer in Compromise Reconsideration Request

IRS Letter 3489 notifies taxpayers that their request for reconsideration of a denied offer in compromise is under review, and outlines the process moving forward.

Reasonable Cause

Reasonable cause is a valid explanation, such as illness or natural disaster, that taxpayers can use to request IRS penalty abatement.

CP161 Notice: Balance Due on Business Taxes

The IRS CP161 Notice informs businesses of an outstanding balance due on their tax return and provides instructions for paying the amount owed.

CP161A Notice: Annual Reminder of Business Tax Balance Due

The IRS CP161A Notice reminds businesses of their outstanding tax balance and provides details on payment options to resolve the debt.

Uncollectible Status (Currently Not Collectible)

Currently Not Collectible (CNC) status is a designation that temporarily stops IRS collection actions for taxpayers unable to pay their tax debt.

Collection Information Statement (CIS)

A Collection Information Statement (CIS) is a financial disclosure form that taxpayers submit to the IRS when requesting payment plans or other tax relief options.

Partial Payment Installment Agreement (PPIA)

A Partial Payment Installment Agreement (PPIA) allows taxpayers to make reduced monthly payments on their IRS tax debt, often settling for less than the full balance.