Category: Tax Returns, Examinations &
IRS Procedure Copyright 1998, The Tax Resource Group. All rights reserved. Telephone 800-578-3498. Internet: www.taxresourcegroup.com Once tax is properly assessed, Section 6502 provides a ten-year period for collection. Collection means filing a notice of seizure under Section 6335(a) or commencement of a collection action in court. Once judicial collection action is begun, the period for collection by levy is extended until the liability is collected or until the such liability becomes unenforceable. Under Section 6503(h), the running of the ten-year collection period is suspended during the pendency of a bankruptcy case under Title 11 and for six months thereafter. Based on our conversation, I assume that the taxes in question were properly assessed. Given the taxpayer actually filed a return and presumably reported the income items in question, the simple ministerial act of recording the tax liability owed constitutes assessment pursuant to Section 6203. I assume also that the Service made the necessary Notice and Demand as required by Section 6303. It seems to me based on our discussion that your client is open to IRS collection action for the 1984 tax year for a period of time extending ten years from the time of actual assessment of the tax (no later than 60 days after the return was filed), plus the length of time during which the bankruptcy was in process, plus 6 months.
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