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After an assessment has been made, the IRS has 10 years to collect the tax by levy or by a court proceeding. Code Section 6502(a). The ten-year period of limitations on collections is computed from the date of assessment. The date of assessment is the date the appropriate IRS official signs the assessment list. The assessment date itself is excluded from the computation. The date on which a levy on property or rights to property is considered made for this purpose is the date on which the notice of seizure discussed in Section 613.7 is given. Code Section 6502(b).

The running of the 10-year period is suspended in the following situations:

(1) If the IRS mails a notice of deficiency, the period for
collection by levy or court action is suspended for the period during which the IRS is prohibited from collecting (90 days from the date of mailing, 150 days if the notice is addressed to a taxpayer outside the United States, or until the Tax Court's decision becomes final, if the taxpayer files a petition in Tax Court), and for 60 days more. Code Section 6503(a).

(2) The period of limitations on collection is suspended for any period during which the taxpayer is outside the United States if the period of absence is for a continuous period of at least six months. If at the time of the taxpayer's return to the United States the period of limitations would expire before the expiration of six months, the period does not expire before the expiration of six months. Code Section 6503(c).

(3) If the IRS commences a timely court proceeding, the period for collection by levy is extended and does not expire until the liability or judgment arising from the liability is satisfied or becomes unenforceable. Code Section 6502(a).

(4) The period of limitations on collection is suspended for any period that the taxpayer's assets are in the control or custody of the court in any proceeding before any court of the United States or of any state or of the District of Columbia, and for six months more. Code Section 6503(b).

(5) If the IRS wrongfully seizes property of a third party, the
collection period is suspended from the date of the seizure to the date the property is returned or the date of a final judgment in a wrongful levy suit, and for 30 days more. Code Section 6503(f).

(6) If the taxpayer files a case in bankruptcy, the period of
limitations is suspended while the IRS is prohibited from collecting and for six months more. Code Section 6503(h).

The period for collection is also extended by other actions the taxpayer takes that have the effect of prohibiting the IRS from collecting for a period of time, such as a Tax Court petition appealing the IRS's denial of a request for innocent spouse relief (Code Section 6015(e)(2)), a request for a collection due process hearing (Code Section 6330(e)(2)), the submission of an offer in compromise (Code Section 6331(k)), and a request for assistance from the Taxpayer Advocate (Code Section 7811(d)).

The statute of limitations also may be extended by agreement between the IRS and the taxpayer. Reg. Section 301.6502-1(b). If the IRS and the taxpayer enter into an installment agreement, the period for collection does not expire until 90 days after the expiration of any period for collection agreed upon in writing by the IRS and the taxpayer at the time the installment agreement was entered into. Code Section 6502(a)(1). Similarly, if there is a release of levy after the 10-year period, the period for collection does not expire before the expiration of any period for collection agreed upon in writing by the IRS and the taxpayer before the release. Code Section 6502(a)(2).

PRACTICE TIP: Ordinarily, the ten-year period should be counted as ten calendar years. But if the period is suspended, the ten-year period may best be counted by the number of elapsed days. This issue was not resolved until 1964, when the Seventh Circuit decided United States v. Tyrell, 329 F.2d 341 (7th Cir.1964). For years, the IRS had used a months-days method, under which a year consisted of eleven calendar months and 30 days (if the limitations period was broken by a suspension). In Tyrell, the IRS relied on its longstanding administrative practice to resist the taxpayer's use of a counting method based on the actual elapsed days,
so that ten years would be equal to nine calendar years and 365 days. These methods do not always produce different results, but they can.