Section 19. Collection Statute Expiration

(1) This transmits revised IRM 5.1.19, Field Collecting Procedures, Collection Statute Expiration.

Material Changes

(1) Refer to table below for details on the list of material changes to this IRM.

Effect on Other Documents

Audience

SB/SE Employees in Field Collection, Specialty Collection - Offers, Liens and Advisory, and Specialty Collection Insolvency

Effective Date

Rocco A. Steco
Acting Director, Collection Policy
Small Business / Self Employed Division

Program Scope and Objectives

1. Purpose: This IRM section will provide an overview of actions that suspend or extend the Collection Statute Expiration Date (CSED). This IRM section also provides guidance for working imminent CSED cases and CSED review. While many topics are touched upon in this chapter, comprehensive guidance about all of them cannot be included here. As you use this IRM section, remain alert for references to other resources, such as related IRMs and websites and access that guidance as needed to ensure a thorough understanding of CSED topics.
2. Audience: The procedures and guidance apply to SB/SE employees in Field Collection, Civil Enforcement Advice & Support Operations (CEASO), and Specialty Collection Insolvency.
3. Policy Owner: The Director, Collection Policy
4. Program Owner: SB/SE Collection Policy
5. Primary Stakeholders: The primary stakeholders that are impacted by this IRM include:

• Field Collection
• CEASO
• Specialty Collection - Insolvency

• identify transaction codes that affect the CSED
• identify case actions that can suspend and or extend the CSED
• identify an imminent CSED
• identify procedures to review and correct a CSED.

Background

1. Each tax assessment has a Collection Statute Expiration Date (CSED). Internal Revenue Code (IRC) 6502 provides that the length of the period for collection after assessment of a tax liability is 10 years. The collection statute expiration ends the government's right to pursue collection of a liability.

Authority

1. IRC 6502
2. IRC 6503

Responsibilities

1. The Director, Collection Policy is the executive responsible for the policies and procedures in this IRM.
2. Field Management is responsible for ensuring that employees comply with guidance and procedures described in this IRM.

Program Management and Review

1. Program Reports:

• National Quality Review System (NQRS)
• Integrated Collection System (ICS)
• Automated Insolvency System (AIS)
• ENTITY Reports

• Case reviews are conducted by field group managers and recorded under the Embedded Quality Review System (EQRS) to ensure compliance with this IRM
• Field territory managers and field area directors annually evaluate program delivery and conformance to administrative and compliance requirements
• Headquarter policy analysts annually evaluate program delivery and conformance to administrative and compliance requirements.

Program Control

1. The Integrated Data Retrieval System (IDRS) provides the transaction coding (TC), definition, and calendar input date that determines the Collection Statute Expiration Date (CSED).
2. The Integrated Collection System (ICS) provides a report that identifies accounts for which the CSED will expire within the next 12 months.
3. ENTITY is the workload management system used by collection managers to extract and organize information about case activity and casework quality from ICS.
4. The Automated Insolvency System (AIS) provides a report that is used to identify non-debtor spouses where the collection statute will expire within two years.

Acronyms

1. This table lists most commonly used acronyms within this IRM.

Related Resources

1. IRM Resources:

1. IRM 5.1.5, Field Collecting Procedures, Balancing Civil and Criminal Cases
2. IRM 5.5.5.3, Collection Statute Expiration under IRC 6503(d)
3. IRM 5.5.7.6, Estate Tax Collection Statute Expiration Date (CSED)
4. IRM 5.8.10.7, Effects of Previous Offers on Collection Statute
5. IRM 5.14.2, Partial Payment Installment Agreements and the Collection Statute Expiration Date (CSED)
6. IRM 5.16.1.2.2, Statute Expiration
7. IRM 5.12.8.5, Refile Determination Criteria
8. IRM 5.17.4, Suits by the United States
9. IRM 25.15.1.8, Statute of Limitations on Collections
10. IRM 25.6.1, Statute of Limitations Process and Procedures

1. CSED Calculator: https://irsgov.sharepoint.com/sites/ETD-KMT-KB065/SitePages/Special%20Circumstances/CSEDs/CSEDCalculatorCCalc.aspx

Transaction Codes that Affect the CSED

1. In addition to Transaction Code (TC) 150 - Tax Assessed, there are certain other TC codes that carry their own CSEDs.
2. Also, there are other TC codes that suspend or extend the expiration date.

Transaction Codes that Carry Their Own CSED

1. Certain transaction codes (TC) with specific reference numbers carry their own CSEDs, and display them on the Integrated Data Retrieval System (IDRS).
2. A list of these TC codes follows:

Caution:

Because of a programming error, TC 240 with penalty reference numbers 680, 681, 682, and 686, posted prior to January 2009, may contain an incorrect CSED on BMF accounts. For collection purposes, TC 240 with reference numbers 680, 681, 682, and 686 has the same CSED as the related tax assessment (TC 290 or TC 300) regardless of the CSED computed on Master File as part of the TC 240.

Integrated Data Retrieval System (IDRS) Transaction Codes (TC) That Suspend Or Extend A CSED

1. Certain actions allow for a suspension or extension of the CSED.
2. IDRS TC codes that suspend or extend CSEDs include but are not limited to:

Note:

Note:

For IMF accounts only, an optional CSED TIN indicator can be used to identify which taxpayer the extension applies to:
(P) Primary; (S) Secondary; or, (B) Both .

TC 550 Waiver Extension Definer Codes

1. A TC 550 extends a CSED to the date input with this transaction on an IMF account.
2. To further identify the use of the TC 550, a list of definer codes and their use follows:

Case Actions That Can Suspend And/Or Extend A CSED

1. A variety of laws affect CSEDs. A brief summary of some of the various case actions that can suspend and/or extend a CSED follows. This IRM provides a brief overview of some of these case actions; it is not all inclusive. The following sections are included to highlight relevant issues. Details pertaining to the specific subject matter should be further researched in the applicable IRM section, which in most cases will be cross-referenced.

Note:

There is an exception to the ten-year CSED where restitution is ordered solely as a condition of the taxpayer’s probation or supervised release. The IRS can only administratively collect an amount of restitution ordered solely as a condition of either probation or supervised release during the actual period of either probation or supervised release, regardless of the general 10-year collection period. Field Collection employees are to contact the assigned advisor for guidance on these RBA cases with limited periods of enforceability issues. See IRM 5.1.5.18, Collection Actions on Cases with Restitution-Based Assessments (RBA), for guidance.

Example:

A taxpayer owes 1040 taxes for the period ending 12/31/2008. The tax assessment date is 06/01/2009 which established the original CSED as 06/01/2019. The taxpayer is in the Army Reserves, they get called up for combat duty and enter the combat zone on 05/10/2014. The taxpayer subsequently leaves the combat zone on 03/01/2015. They submit an offer in compromise on 04/20/2015, it is rejected on 10/17/2015 and the rejection is not appealed.
Both case actions, entering the combat zone and submitting the offer in compromise, suspend and extend the CSED. The combat zone duty suspends the CSED from 05/10/2014 through 03/01/2015 plus 180 days (through 08/28/2015). Consideration of the offer in compromise suspends the CSED from 04/20/2015 through 10/17/2015 plus an additional 30 days for the rejection appeal period to 11/16/2015.
However, because these case actions overlap, the CSED will be suspended only from the date the taxpayer enters the combat zone (TC 500 cc 56 on 05/10/2014) through the date the offer in compromise is rejected and the rejection appeal period ends (TC 481 on 11/16/2015). In this case the overlapping of the two case actions, from 04/20/2015 to 08/28/2015, is considered in the CSED extension only once.
The CSED will be extended 555 days from the original CSED of 06/01/2019. The new CSED will be 12/07/2020.

Bankruptcy

1. In a case under the Bankruptcy Code, the CSED is suspended while the IRS is prohibited from collecting, and for six months thereafter. For more information see IRC 6503(h)(2). Thus, the CSED is generally suspended while the automatic stay imposed by the bankruptcy is in effect. Even if the suspension of the CSED under IRC 6503(h) no longer applies, the CSED still may be suspended when substantially all the debtor’s assets remain in the custody or control of the bankruptcy court under IRC 6503(b). For more information see IRM 5.9.4.3, ASED/CSED.
2. Contact Insolvency if there are any questions about the effect of bankruptcy, particularly multiple bankruptcies, on the CSED.

Transaction Codes for Bankruptcy

1. A TC 520/521 suspends a CSED by the amount of time beginning on the TC 520 (posted Cycle 8624 or later) transaction posting date and ending on the associated TC 521 posting date, plus six months.
2. A TC 520 with a closing code 60 through 67, 81, 83, or 85 through 89 systemically suspends the CSED unless a TC 550 (new CSED) is posted with a later transaction date. For more information see IRM 5.17.8.28, Effect of Bankruptcy on the Limitation Period for Assessment and Collection and IRM 5.9.5.6.1, Closing Codes
3. For a joint liability, the following CSED indicators are used to identify which taxpayer filed bankruptcy:

• P = Primary
• S = Secondary
• B = Both

Judgment/Litigation

1. Per IRC 6502(a) a court action brought against the taxpayer for the collection of tax prior to the expiration of the collection statute extends the period to collect until the tax liability or judgment against the taxpayer is satisfied or becomes unenforceable.
2. There is an exception to the ten-year CSED (see IRM 5.1.5.18, Collection Actions on Cases with Restitution-Based Assessments (RBAs) for guidance related to some RBA cases. Field Collection employees are to contact the assigned advisor for guidance on these RBA cases with limited periods of enforceability issues.

Transaction Codes for Judgment/Litigation

1. TC 520 with closing code 70 through 75 and closing code 84 does not suspend the CSED.
2. TC 520 with closing code 76 through 81 suspends the CSED, unless a TC 550 (new CSED) is posted with a later transaction date. See also IRM 25.3.6-1, Closing Codes for Transaction Code 520 and IRM 25.3.7.7, TC 520 Closing Codes.

Suit to Reduce Assessments to Judgment

1. A suit to reduce the assessments to judgment must be filed prior to the expiration of the CSED to suspend the collection period. The filing of a suit will suspend the collection statute during litigation. For more information see IRM 5.17.4.7, Suit to Reduce Assessments to Judgment.
2. When a judgment is entered in a case where assessments were reduced to judgment, request input of TC 550, definer code 04, using 20 years from the date the judgment was entered as the new CSED.

Reminder:

The TC 550 definer code 04 must be input before the TC 520 is reversed. This will prevent the CSED from expiring if it falls during the pendency of the litigation.

Collection Due Process (CDP)

1. The CSED is suspended from the date the IRS receives a timely filed request for a CDP hearing to the date the taxpayer withdraws their request for a CDP hearing or the date the determination from the Independent Office of Appeals (Appeals) becomes final, including any court appeals. See IRC 6330 (e)(1).
2. If less than 90 days of the statute of limitations remains when the determination becomes final, the statute of limitations is extended to equal 90 days. The collection statute is not extended for equivalency hearings. See IRC 6330(e)(1).
3. For more information see IRM 5.1.9.3.6, Suspension of Collection Statute of Limitations, and 26 CFR 301.6330–1(g)(3), ex. 1.

Transaction Codes for Collection Due Process (CDP)

1. TC 520 CC 76 is used if the CDP hearing request is made in response to a CDP NFTL notice (IRC 6320). TC 520 CC 77 is used if the CDP hearing request is made in response to a CDP levy notice (IRC 6330). If both IRC 6320 and IRC 6330 are applicable, TC 520 CC 76 is used. Prior to January 2000, TC 520 CC 70 was used for CDP hearing requests.
2. For a joint liability, the following CSED indicators are used to identify which taxpayer requested the CDP:

• P = Primary
• S = Secondary
• B = Both

Offer In Compromise (OIC)

1. For requests to extend the CSED made prior to January 1, 2000 in connection with a pending offer prior to January 1, 2000, the CSED extension was affected by Treasury Regulation 301.7122–1(f) (1960). Under this regulation the practice of the IRS generally was to obtain from the taxpayer a waiver of the CSED for the period the offer in compromise was pending, while any installment of an accepted offer remained unpaid, and for one additional year thereafter.
2. For requests to extend the CSED made prior to January 1, 2000 in connection with a pending offer that extended the CSED beyond the original 10-year collection statute, a waiver of the CSED cannot extend the CSED beyond either December 31, 2002, or the original CSED, whichever is later, see section 3461(c)(2) (A) and (B) of the IRS Restructuring and Reform Act of 1998.
3. For offers pending on or made after December 31, 1999, and before December 21, 2000, the collection statute of limitations is suspended by IRC 6331(k)(1) and (3)while the IRS is prohibited from levying.
4. The IRS is prohibited from levying and the CSED is suspended under the following provisions:

1. While an offer is pending with the IRS,
2. For 30 days immediately following rejection of the offer for the taxpayer to appeal the rejection, and
3. If an appeal is requested within the 30 days, during the period while the rejection is being considered in Appeals.

Note:

If a request for CSED extension was made on December 31, 1999 in connection with a pending OIC, the statute is extended concurrently under both RRA 98 section 3461(c)(2) and section 6331(k)(1) and (3).

Example:

An offer is rejected on March 4, 2002. March 4, 5, 6, 7 and 8 would not be suspended. The 30-day period for appealing the rejection starts on March 5 and ends on April 3. Of that 30-day period, the collection statute would be suspended starting on March 9 through and including April 3. If the taxpayer requests an appeal on or before April 3, then the collection statute will be suspended until Appeals sends the taxpayer a letter giving its decision.

Transaction Codes for Offer In Compromise

1. Effective March 09, 2002, the input of TC 480 suspends the CSED during the time an offer is pending, during the thirty days following rejection of an offer, and for any period when a timely filed appeal from the rejection is being considered by Appeals. That is for the period of time between the TC 480 and the TC 481, TC 482, or TC 780.
2. For a joint assessment, if only one spouse files an OIC, then the CSED is suspended just for that taxpayer. The appropriate CSED suspension code must be input on IDRS to identify the specific taxpayer for which the offer applies. They are described below:

• P = Primary
• S = Secondary
• B = Both

Installment Agreements

1. For requests to extend the CSED made prior to January 1, 2000, in connection with an installment agreement that extended the CSED beyond the original 10-year collection statute, the CSED waiver expires 90 days after the end of the period of the extension, pursuant to section 3461(c)(2)(C) of the IRS Restructuring and Reform Act of 1998.
2. For requests to extend the CSED on or after January 1, 2000 in connection with an installment agreement, the statute of limitations is suspended under IRC 6502(a)(2) for the period agreed to in writing by the IRS and the taxpayer and for 90 days after that period expires.
3. Form 900, Tax Collection Waiver, is only executed in connection with the granting a partial pay installment agreement and only in certain situations. See IRM 5.14.2.2.3, Waiver Procedures for Partial Payment Installment Agreements. IRS policy dictates that a Form 900 be limited to no more than five years, plus up to one year to account for changes in the agreement.

Note:

Prior to July 2005, IRS policy permitted CSED extensions in conjunction with all installment agreements.

1. While the request for installment agreement is pending with the IRS,
2. For 30 days immediately following rejection of the installment agreement request, and
3. If an appeal is requested within the 30-day period, during the period while the rejection is being considered in Appeals.
4. During the 30 days after the date of termination, and
5. If an appeal is requested within the 30-day period, during the period while the termination is being considered in Appeals.

Note:

Example:

An installment agreement is terminated on March 4, 2002. March 4, 5, 6, 7, and 8 would not be suspended. The 30-day period for appealing the termination starts on March 5 and ends on April 3. Of that 30-day period, the collection statute would be suspended starting on March 9 through and including April 3. If the taxpayer requests an appeal on or before April 3, then the collection statute will be suspended until Appeals sends the taxpayer a letter giving its decision.

Note:

An installment agreement is deemed terminated on the 60th day after the date of the CP 523 or Letter 2975, unless the taxpayer requests a CAP hearing challenging the proposed termination during the 30 days after the date of the notice.

Note:

If a request for CSED extension in connection with a request for an installment agreement was made on or after December 31, 1999, and before December 21, 2000, or on or after March 9, 2002, the collection statute is extended concurrently under both section 6502(a)(2) and section 6331(k)(1) and (3). For CSED extensions given on or after December 21, 2000, and before March 9, 2002, only section 6502(a)(2) suspends the statute of limitations. For more information see IRC 6159(a) ,IRC 6331(k) , and IRC 6502(a).

Transaction Codes for Installment Agreements

1. A TC 971 AC 043 suspends the CSED while an installment agreement (IA) is pending.
2. A TC 972 AC 043 (pending IA reversal) and a TC 971 AC 063 (established IA) stops the CSED suspension.
3. A TC 971 AC 163 extends the CSED for 30 days if the TC 971 AC 163 is input due to a terminated IA.

Note:

Check for any unreversed pending IAs for assigned accounts (a TC 971 AC 043 not followed by a TC 972 AC 043 or a TC 971 AC 063). Verify if the pending IA is a processable request and resolve the request. See IRM 5.14.1.3.1, Cases Received From ACS or Campuses, IRM 5.14.1.3, Identifying Pending, Approved, and Rejected Installment Proposals on IDRS, and IRM 5.14.1-1, Input of Transaction Code 971 Action Codes 043 and 063 for Pending and Active Installment Agreements, for additional information.

Relief From Joint And Several Liability On Joint Returns/Innocent Spouse

1. Unless collection will be jeopardized by delay, collection by levy or proceeding in court against a requesting spouse is suspended if they make a qualifying request under IRC 6015(b) or IRC 6015(c). Collection against a requesting spouse is suspended if they make a qualifying request under IRC 6015(f) and the liability arose on or after December 20, 2006, or arose prior to December 20, 2006 and remained unpaid as of that date. For more information see IRM 25.15.1.8, Statute of Limitations on Collection.
2. The collection period is suspended from the filing of the claim until the earlier of the date a waiver is filed, or until the expiration of the 90-day period for petitioning the Tax Court, or if a Tax Court petition is filed, when the Tax Court decision becomes final, plus, in each instance, 60 days.
3. If a request for relief is made in response to collection due process procedures, collection activity is suspended and the collection period provided for by IRC 6330(e) for the period during which any administrative hearings, and appeals therein, regarding the levy are pending. The rules for suspension under IRC 6330 differ from IRC 6015. In general, the latest suspension of collection and the collection period should control, which may require analyzing the suspension under both IRC 6015 and IRC 6330 where relief from joint and several liability is requested as part of an IRC 6330 hearing.
4. If the requesting spouse signs a waiver of the restrictions on collection, the suspension of the period of limitations on collection against the requesting spouse will terminate 60 days after the waiver is filed with the IRS, limiting the CSED extension to the period from when the claim was filed to the time the waiver was signed, plus 60 days.
5. A request for reconsideration is not a qualifying request for relief for purposes of 26 CFR 1.6015-1(h)(5), and does not trigger the restrictions on collection pursuant to IRC 6015(e)(1)(B) or the suspension of the collection period of limitation under IRC 6015(e)(2).

Transaction Codes for Innocent Spouse

1. The TC 971 AC 065 will track the possible suspension of the CSED. See IRM 25.15.2.4.2, Innocent Spouse Indicator Transaction Code (TC) 971/972 for additional information.
2. For a non-mirrored module, the CSED must be determined for each spouse separately. See IRM 25.15.8.6.2.1, Non-Mirrored Modules and IRM 5.1.19.6 , Collection Statute Review for additional information.

Taxpayer Living Outside the U.S.

1. The period of limitations on collection after assessment is suspended while the taxpayer is outside the United States if the absence is for a continuous period of at least six months per IRC 6503(c) .
2. To make certain that the Government has an opportunity to collect the tax after the taxpayer's return, the period does not expire (where the taxpayer has been out of the country for six months or more) before a minimum of six months after the taxpayer's return to the country. As the application of this provision can result in the CSED being suspended for a very long time, policies for the administration of this code section are now established.

Policies For Adjusting the CSED When Internal Revenue Code (IRC) 6503(c) Applies

1. These instructions are designed to promote procedural consistency in working International cases and to make statute suspension procedures, applying to Domestic and International taxpayers, more comparable. They apply to taxpayers who are presently abroad as well as to taxpayers who are currently in the U.S., but who were abroad for at least six consecutive months after the tax assessment date.
2. The period that the CSED is recalculated and updated will be more limited with respect to taxpayers who have cooperated with IRS to resolve their liabilities or with whom we have maximized the IRS’s ability to collect.
3. A taxpayer will be considered "cooperative" if the IRS determined that the taxpayer has fully responded to the IRS and has provided full information to the IRS with respect to collection of the assessment. In such instances, the case may be resolved by a taxpayer entering into a formal installment agreement or a valid offer in compromise or with the case being closed as currently not collectible (CNC) for hardship reasons with closing codes 24 through 32.
4. This policy does not apply to international taxpayers who have not resolved their liabilities and who are not cooperative. In those situations, where a taxpayer has been uncooperative or has not resolved the liability, the CSED will be recalculated and updated for the maximum amount of time allowed by IRC 6503(c) if the IRS determines that there is significant collection potential.

1. With respect to taxpayers who are currently outside the United States, and who have systemically loaded or manually monitored installment agreements or periodic payment offers in compromise or periodic payment offers in compromise, for which the payment schedule is up to 24 months, the maximum length of CSED recalculation is 16 years from the date of assessment.
2. Continuous levies for taxpayers with international addresses will be recalculated and updated for however many years the IRC 6503(c) provision allows if the taxpayers involved have not cooperated with IRS to resolve their liabilities.
3. For taxpayers with significant collection potential that have been out of the United States for a lengthy period of time, recalculate the CSED as necessary for the time anticipated to collect the liability up to the maximum time allowed under IRC 6503(c). Assets located outside the United States can count as significant collection potential. Although assets located outside the jurisdiction of the United States cannot usually be levied or seized, other collection tools may be available to reach them. See IRM 5.21.3, Collection Tools for International Cases.

Example:

Assets located in a country with which the U.S. has a mutual collection agreement may be seized or levied by the mutual collection country.

Reasons For Recalculating the CSED For IRC 6503(c)

1. Reasons can be based on the following criterion (applied to the extent that the policies above allow):

1. A Form 433A that the taxpayer or power of attorney has signed stating the dates of residence outside the United States and Commonwealth Territories.
2. Any other written information from the taxpayer or power of attorney stating the taxpayer was outside the United States and Commonwealth Territories.
3. Oral statements by the taxpayer or power of attorney stating the dates the taxpayer was outside the United States and Commonwealth Territories so long as this information is clearly documented in the case history.
4. Tax returns consistently filed since the year of tax assessment with a foreign address (with recalculation and update of the CSED up to the date the taxpayer signed the return).
5. When you are not able to use one of the methods above to determine and verify the period the CSED is to be suspended, check data sources such as Accurint, credit report, IRP, third party testimony, etc., to determine whether a taxpayer has been outside the United States for a long period of time. Such sources may be used in later taxpayer or POA discussions to confirm the dates of foreign travel/residence; however, do not rely solely on these sources to justify updating the CSED.

CSED Suspension for Partnerships with Addresses Outside the U.S.

1. Per IRC 6503(c) the running of the collection statute is suspended for the period during which a taxpayer is outside the United States for a continuous period of at least six months. Per IRC 7701(a)(1) and (a)(14), the term "taxpayer" includes partnerships.
2. For partnerships with an address outside the U.S. see the If/Then table below:

1. Does the partnership own property within the U.S.?
2. Was the partnership formed or registered within a state?
3. Does the partnership have a resident agent?
4. Does the managing partner (general partner) reside in the U.S.?
5. Do the majority of partners reside in the U.S.?
6. Does the partnership earn a substantial amount of its income from activities within the U.S.?

Note:

It may not be beneficial to recalculate a partnership's CSED if there is no collection potential.

Procedures For Adjusting the CSED for International Taxpayers (IRC 6503)

1. Use Form 8620, Statute Recalculation to request CSED updates based on the criteria established above. Because IRC 6503(c) automatically suspends the statute, there is no reason for the taxpayer to sign Form 8620.
2. Send Forms 8620 via secured e-mail to Centralized Case Processing (CCP) at the campus address to which input requests are sent.

Note:

Statute recalculations and updates for IRC 6503(c) must have managerial approval on Form 8620 or on ICS.

1. The sources checked to verify that the taxpayer resided outside of the United States, and
2. The steps followed to calculate the new CSED.

Reminder:

Check for any other case actions that may have also suspended the CSED while the taxpayer was outside of the United States. Overlapping suspensions run concurrently; they are not cumulative. See IRM 5.1.19.3 (2) , Case Actions That Can Suspend And/Or Extend A CSED for additional information.

Combat Zone or Contingency Operation

1. Under IRC 7508 the deadlines for certain acts performed by either taxpayers and the IRS are postponed when the taxpayer serves in:

• An area designated as a combat zone by the President of the United States by Executive order;
• A contingency operation designated by the Department of Defense;
• A qualified hazardous duty area as defined by Congress; or
• Direct support of military operations, as certified by the Department of Defense, in a combat zone, contingency operation, or qualified hazardous duty area.

Note:

Under IRC 7508(c) the deadlines for certain acts are also postponed for the spouse of a taxpayer who qualifies based on the service described above. However, under IRC 7508(g) the deadlines will not be postponed for the spouse of a taxpayer for whom postponement is available based on ‘qualified hospitalization’ if the taxpayer is hospitalized inside the United States.

• Paying Income tax, Estate, Gift, Employment or Excise Tax, and
• Collecting any tax.

Note:

Rev. Proc. 2018-58, or its successor, expands the list provided in the statute.

Exception:

Under IRC 7508(e)(1), section 7508(a) does not postpone bankruptcy or receivership proceedings, jeopardy assessments, jeopardy levies, or the IRC 7429 proceedings that may follow these IRS jeopardy determinations, or Tax Court proceedings under IRC 6901 involving a transferee of the taxpayer (or spouse) who is serving in the combat zone or contingency operation.

Exception:

Per IRC 7508(e)(3) the collection statutory period is not extended (even if a deadline is postponed) during any period of continuous qualified hospitalization as a result of injury received while serving in the combat zone or contingency operation and the following 180 days. It is not clear that the Tax Court proceeding after a jeopardy assessment is postponed under IRC 7508.

• Processing of a tax return where the taxpayer has written "Serving in Desert Storm/Shield, Bosnia, former Yugoslavia, Allied Force, Afghanistan, Enduring Freedom, or the Sinai Peninsula."
• Manual input of Transaction Code 500 with Closing Code 52 for the Desert Storm Combat Zone, Closing Code 54 for Bosnia/Former Yugoslavia or Allied Force, Closing Code 56 for Afghanistan or Iraq/Enduring Freedom, or closing code 58 for Combat Zone Hospitalization. For more information see IRM 5.1.7.10.3, Combat Zone Freeze Codes.

Exception:

There may be occasions when a taxpayer in an active combat zone either wishes to make a payment or wants to have a return assessed (for example to obtain EITC). Process the return or payment and advise the taxpayer that the collection and assessment statutes will continue to be suspended.

Military Deferment

1. Under the Service Members Civil Relief Act of 2003 (cited as 50 USC. 4000) the collection of any income tax due from any person in the military service, whether falling due before or during military service, may be deferred up to 180 days if ability to pay the tax is materially affected because of that person's military service. The CSED is suspended during the taxpayer's military service and for an additional 270 days afterward.
2. A military deferment suspends the CSED. The Transaction Code 500 with Closing Code 51 identifies a military deferment. For more information see IRM 5.1.7.13.1, Military Deferment Procedures.

Wrongful Levy (Seizure)

1. A wrongful levy suspends the running of the period of limitation on collection pursuant to IRC 6503(f)(1). The collection statute is suspended for a period equal to the period from the date property is wrongfully seized or received to the date returned under IRC 6343(b) or the date on which a judgment under IRC 7426 becomes final, plus an additional 30 days. Definer code 08 is used with TC 550.
2. The suspension is only applicable to an amount equal to the amount of money or the value of the property returned. For more information see IRM 5.10.6.15, Wrongful Seizure - Payment of Claims After Sale.

Wrongful Lien

1. A wrongful lien suspends the running of the period of limitations on collection. Under IRC 6503(f)(2) the collection statute is suspended from the date any person becomes entitled to a certificate of discharge of lien under IRC 6325(b)(4) until the earlier of the earliest date on which the IRS no longer holds any amount as a deposit or bond under IRC 6325(b)(4) or the date on which a judgment under IRC 7426(b)(5) concerning the amount deposited or used as bond, becomes final. Definer code 08 is used with TC 550.
2. Where the period of limitations is suspended under this provision, it is suspended only for the value of the interest of the United States in the property plus interest, penalties, additions to tax, and additional amounts attributable. For more information, see IRM 5.12.10.3.5.5, Suspension of the Running of the Statute.

Estate Taxes

1. Taxes assessed on Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return, are allowed various special elections under the Internal Revenue Code that allow for deferral of payment of estate taxes due. Under IRC 6503(d) the CSED is suspended for the period of any extension of time for payment that is granted under IRC 6161, IRC 6163, or IRC 6166.. See also IRM 5.5.7.6, Estate Tax Collection Statute Expiration Date (CSED).
2. The two code sections commonly used to defer payment of estate tax due are sections, IRC 6166 and IRC 6161. Estates must meet specifications outlined in the Code in order to qualify for these payment deferrals.
3. IRC 6166 generally allows for a five-year deferral and thereafter annual installment payments over a 10-year period. TC 488 is input on IDRS to identify accounts that may have been granted a payment deferral under IRC 6166. Generally the CSED is extended for the period of time between the tax assessment date and TC 489 date, which reflects reversal of the allowance of this special election. IRM 5.5.7.6.2, CSED - IRC 6166 Deferred Tax, provides additional information on collection of estate tax accounts and the CSED. Also, IRM 5.5.7.6.2.1, CSED - All Tax Deferred Under IRC 6166 and IRM 5.5.7.6.2.2, Multiple CSEDs - Tax Deferred Under IRC 6166 and Tax Non-Deferred provides additional information on how to determine the CSED on IRC 6166 accounts.
4. IRC 6161 allows an extension to pay estate taxes for up to 12 month increments for a maximum of 10 years for taxes reported on the return and a maximum of four years for amounts determined as a deficiency. TC 468 is input on IDRS to identify accounts that may have been granted additional time to pay estate taxes due under IRC 6161. Generally the CSED is suspended from the date of the assessment of the tax to the extended payment date as shown on IDRS TC 468 next to “EXT - DT>. IRM 5.5.7.6.1, CSED - IRC 6161 Extension of Time to Pay Requests, provides additional information on IRC 6161 accounts and the CSED. Also, IRM 5.5.7.6.1.1, CSED - Initial IRC 6161 Extension of Time to Pay Requests, IRM 5.5.7.6.1.2, CSED - Subsequent IRC 6161 Extension of Time to Pay Requests, and IRM 5.5.7.6.1.3, CSED - Denial of IRC 6161 Extension of Time to Pay Requests provides additional information on how to determine the CSED on IRC 6166 accounts.
5. An extension to pay under IRC 6161 may be requested on annual installment payments deferred under IRC 6166. Both the IRC 6166 election and the IRC 6161 election suspend the collection statute. When more than one action suspends the running of the collection statute, and the suspensions overlap, the collection statute is suspended only once. See IRM 5.1.19.3 , Case Actions That Can Suspend And/Or Extend A CSED and IRM 5.5.7.6.2, CSED - IRC 6166 Deferred Tax for additional information.
6. CSEDs should always be checked when working estate tax accounts. The Advisory Estate Tax Lien Group can provide assistance with proper calculation of the CSED related to IRC 6161, 6163, and 6166.
7. The tax liens under IRC 6324(a) and IRC 6324(b) expire exactly 10 years from the decedent's death or the date of the gift, respectively, whether or not any action for the collection of such tax has been commenced or the CSED under IRC 6502 remains open.

Taxpayer Assistance Order (TAO)

1. IRC 7811(d) and the accompanying regulations provide that if a taxpayer submits a Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), the statute of limitations on collection and/or assessment will be suspended beginning on the Taxpayer Advocate Received Date and ending on the TAS decision date. See IRM 13.1.14 , Suspension of the Statutes of Limitation Under IRC 7811(d).
2. Due to systemic programming limitations, the Commissioner decided in November 2003, that Taxpayer Advocate Service (TAS) does not have to input the appropriate IDRS codes to reflect the suspension of the statute of limitations under IRC 7811(d). The program limitations are still in effect. Therefore, IDRS codes are not input to show the correct suspension periods for IRC 7811(d) at this time. See IRM 13.1.14.2, No Implementation of IRC 7811(d) Statute Suspension .

Enforcement Of The Two-Tier Tax Scheme

1. Under IRC 4961(c) the collection statute of limitations to collect second-tier taxes is suspended while levy and proceeding in court are prohibited to collect second-tier taxes. Levy and proceeding in court are prohibited if within 90 days after the second-tier tax is assessed the first tier tax is paid in full, a claim for refund is filed and denied, and a suit for refund is filed within 90 days after the refund claim is denied. See Pub 5616, section II E, Enforcement of the Two-Teir Tax Scheme. The prohibition lasts during the timely filed action until a judgment becomes final and during a later supplemental proceeding under section 4961(b) (after the refund suit judgment becomes final) until the determination therein becomes final. If an action is not filed within 90 days after the refund claim is denied, levy and proceeding in court are prohibited until the end of the 90-day period. Levy and proceeding in court are prohibited from the assessment of the second-tier tax until the end of the 90-day period if the first-tier tax is not paid in full or a refund claim filed within the 90-day period.

Substitute for Return

1. When a taxpayer fails to file a timely income tax return or files a false or fraudulent return, the IRS may execute a return under the authority of the IRC 6020(b) and make an assessment pursuant to deficiency procedures. If the taxpayer fails to respond to the notice of deficiency, the IRS makes a deficiency assessment. The IRS may also make a deficiency assessment if the deficiency is upheld by the Tax Court. Upon that assessment, the 10-year period of limitations on collection begins per IRC 6502(a)(1).
2. If the taxpayer later files their own "original" return showing a tax liability smaller than the assessed liability, and that return is accepted by the IRS as filed, the deficiency assessment should be abated to show the amount of tax reflected on the taxpayer's return. The original CSED date remains intact.
3. If the taxpayer's "original" return reflects more tax than that assessed from the notice of deficiency based on IRC 6020(b) return, then an additional assessment is input for the increased amount. In this scenario, the original CSED remains intact and a second CSED will be systemically established based on the additional assessment.

CSED Wavier

1. Prior to its amendment by the Restructuring and Reform Act of 1998 (RRA 98), IRC 6502(a) authorized the Secretary to accept waivers extending the statute of limitations on collection after assessment prior to the expiration of the collection period. The Code did not place any restrictions on the length of the extension, the number of times an extension could be granted or the circumstances under which an extension could be obtained. RRA 98 significantly revised the law regarding CSED waivers. Extensions in effect on December 31, 1999, as well as requests for extensions made on or before December 31, 1999, that resulted in extension being in effect, are subject to the following:

1. At the same time a partial payment installment agreement is made, when appropriate (see IRM 5.14.2.2.3, Waiver Procedures for Partial Payment Installment Agreements).
2. Prior to a release of levy under IRC 6343 that occurs after the expiration of the statutory Ten-Year period for collection.
3. The collection statute of limitations is suspended for the period agreed to in writing. If the extension (waiver) is in connection with a partial payment installment agreement, then the suspension lasts for an additional 90 days after the period agreed to in writing.