The last year that our family business was in operation was in 2003. My understanding of statute of limitations is that the IRS has 10yrs to try and collect the debt. I entered into an installment agreement using a tax service in December 2003 and have been making my payments. I recently called to get a payoff balance and the IRS said it had to recalculate based on my time in a combat zone. Can the IRS change the amount owed after the 10yr statute of limitations has expired and after an installment agreement has been reached?
As previously mentioned, the IRS statute of limitations tolls (freezes) while in a combat zone. It continues upon your return. I could be wrong but I think it's 180 days after your return. Depending on how much you owe, your current financial situation, and your proximity to the statute expiration date, you could be a candidate for an IRS offer in-compromise.
As the others have said, certain things, like being in combat, can toll the statute of limitations (generally because the IRS is prevented from collecting during those events), which means that the total payoff amount may have to be adjusted.
My answer does not constitute legal advice and may not be relied upon by anyone for any purpose and does not constitute an attorney/client relationship or an offer to form such a relationship. This disclaimer is intended to be fully compliant with the requirements of Treasury Department Circular 230 and the terms thereof are fully incorporated by reference.
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