7 Important FAQs Regarding IRS Statutes of Limitations | Axiom Tax Resolution Group

The IRS has a number of statutes of limitations in place that dictate how long the agency has to collect tax refunds, pursue an audit, or file taxes. These statutes can be confusing, so we’ve compiled a list of seven important FAQs to help you better understand them. It’s also ideal to consult a tax specialist on the matter.

Continue reading to learn more.

1) How Long Does a Tax Refund Last?Axiom Tax Resolution Group

If the IRS owes you a refund, you have a few years to claim it. To be more specific, the agency is required to issue refunds within 45 days of the filing date, and an institution has at least three years to claim that tax refund. If you don’t receive your refund within that period of time, check on the status of your refund. The three-year clock begins on the date you file your return.

2) What Happens to Uncollected Tax Refunds?

If you are owed a tax refund, and the IRS is unable to issue it to you, the refund will be sent to the U.S. Treasury. The Treasury will then hold onto the refund for a set period of time. After that period of time has elapsed for claiming those refunds, the refund will be considered unclaimed and will be forfeited to the government.

3) What Are Exceptions for Tax Refunds?

The three-year clock for claiming a tax refund does not apply in certain cases. For example, if you are experiencing physical or mental impairments that are preventing you from managing your finances, the clock is paused until that situation is resolved. Additionally, if you have tax deductions for bad debt, the period is extended to seven years.

4) How Long Does the IRS Have to Audit Returns?

The IRS has about three years to audit tax returns. This applies to both state and federal taxes. If the IRS finds that an individual or establishment owes more taxes than what you paid, you will be responsible for paying that amount plus interest. If you do not pay, the IRS may file a notice of lien against your property.

5) What Are Exceptions to the Audit Rule?

There are exceptions to the three-year rule. One is if you did not report at least 25 percent of your gross income. In this case, the IRS has six years to audit your return. Another exception is if you filed a false or fraudulent return to the agency. In this case, the IRS has no time limit for auditing your return.

6) How Long Does the IRS Have to Collect Taxes?

The IRS has around ten years to collect taxes that you owe. After ten years, the IRS can no longer take legal action against you for unpaid taxes. However, this does not mean that you will not have to pay taxes. The IRS can still send you a bill for the taxes you owe, which can entail the total amount of taxes plus interest.

7) How Should You Plan and File Your Taxes?

There is no singular answer to how you should plan your taxes, as it should depend on your individual situation and tax needs. However, some principles can help you plan and file your taxes more effectively. For instance, keep accurate records of your income, deductions, and expenses. Timely planning and filing are also recommended.


In conclusion, the IRS has a number of various statutes of limitations that apply to different types of taxes and tax situations. It’s important to be aware of these deadlines so that you can file your taxes in a timely manner and avoid any penalties.

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