The IRS flexes its muscles against billionaire for 40 year-old tax bill. Last week an article was published that has the potential to make your blood run chill. The IRS speaks volumes in its decision to pursue collection activity against billionaire, Sumner Redstone. The IRS wants its money (including crippling penalties and interest) for a disputed tax bill that is 40 years old! The IRS wants to send a message: that they are the most powerful collection agency on the planet.
Mr. Redstone started his career on the other side of tax disputes as a lawyer for the U.S. Department of Justice. For this reason he, of all people, should know that the IRS is ruthless. In 1972 Redstone had a questionable transaction, and did not report it to the IRS. Whether it was related to business or related to family gifting has yet to be determined. The one thing that has been determined however is that the IRS has the ability to come after you forever, until you file a return.
The IRS has what they call a CSED. This stands for Collection Statute Expiration Date. The CSED grants a statutory collection period. The IRS has a 10 year window, or time-clock, per period, to collect against a taxpayer for unpaid liabilities, and that 10 year ticker does not start until a return has been filed. Thus once you file a return, the IRS has 10 years in which to collect taxes for that period. The flipside to this is that until a return has been filed, either by you, or by the IRS in the form of a Substitute for Return (“SFR”), the IRS can enforce collection activity against you for the rest of your life.
Do yourself a favor – File your tax return timely; start the CSED! You may think that you can hide from the IRS forever, but hide and seek is a dangerous game to play; and you should remember that just as you can hide, they can and will continue to seek.
Contact Travis Watkins, a local, licensed, professional tax lawyer in Oklahoma City, Oklahoma. I will fight hard with the IRS so you don’t have to.