Austin Tax Blog


Most taxpayers feel that the IRS has the power to just demand an audit or examination of taxpayer’s taxes. This can be too threatening on the part of the taxpayers and the companies since the result of such examination usually entails higher penalties, greater amounts of tax liabilities, and sometimes, if the taxpayer is unfortunate enough, it can result to fraud.

This is why it is important to know that the IRS has statute of limitations too and it cannot go beyond the prescribed period as provided by the statute. Particularly in Austin, IRS has also a set of limitations that taxpayers residing in Austin should probably know for their own protection as well.

IRS has the ability to demand collection of payment upon assessment of taxes. However, such capacity can only be exercised only up to 10 years. Once it expired, IRS can no longer collect from the taxpayers. The ten-year period also applies to tax liens imposed on properties and assets.

But, even though such limitations may be quite of a good news, it is important to know that IRS can get the court’s judgment in their favor and thus, the 10 year period may be extended or renewed. It is also necessary to take note that the prescriptive period of ten years begins upon the assessment of taxes of the taxpayer and not upon the attaching or filing of lien.

 IRS Statute of Limitations in Austin


The above-mentioned limitations of the IRS are deemed applicable in general. This means that it varies on each state. In the case of Texas, state taxes imposed on sales, property, or unemployment are only subject to assessment up to four years only if the tax assessed are considered sue and payable.

This means that if the assessment was done and the four-year period has prescribed, the tax can no longer be collected. This means that the government must make sure that they have assessed the taxpayers and companies within four years.

The government of Texas then must have filed the action to collect taxes within three years to make sure that the four-year period is not expired. Also, it must be filed once the tax has become due and payable or once the lien has been put into record.

limitations of the IRSHowever, the three-year statute of limitations also has an exception. Such limitation cannot be invoked of the taxes that are imposed are considered to be a product of fraud, or in simple terms, the taxpayer is fraudulent.

Another situation would be if the taxpayer failed to file the taxes and such tax has error. And statute of limitation is suspended in cases of pendency of bankruptcy, taxpayer was subject to protest, and there is a present lawsuit that needs to be conducted to find out the amount of the tax liabilities of the taxpayer are.

Keeping in mind with these limitations, you may assert your right and you may know when to file your taxes on time so as to avoid having problems with the IRS.