Monday, February 22, 2010

Questions for the Tax Lady: February 22nd, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: How long does it take to get a refund from the IRS?

If you e-file and use the direct deposit option then you could receive your refund within three weeks. However, if you went the paper route it could take upwards of eight weeks. If you want to know exactly when to expect your money, you can track your refund on the IRS's Where's My Refund page.

Question #2: What is the statute of limitations on Federal income taxes owed?

Generally speaking, the IRS statute of limitations is 10 years. However, there are a number of ways the IRS can get past this limit. According to “the IRS generally must collect the tax owed within 10 years after the assessment of the tax. Depending on the taxpayer, the assessment of tax may be the date a taxpayer files a tax return with a balance owing or the date the IRS files a tax return on behalf of a non-filer taxpayer. Thus, the statute of limitations will begin once the tax liability has been ‘assessed’ by the IRS.”

“Although the IRS generally has just 10 years to collect on an outstanding tax liability, there are certain events or transactions that may extend or suspend the statute from expiring. Various laws affect the statue of limitations expiration date. For example, if a taxpayer files bankruptcy or files an Offer in Compromise, the statute of limitations is generally suspended during the time the bankruptcy or Offer in Compromise is under review. Also, additional assessments of tax owing may extend the amount of time that the IRS is allowed to collect. Therefore, if the IRS is going to collect taxes owed, they must do so within the time frame permitted by law.”

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