Collections Statute Expiration Date (CSED) — Definition Glossary

Defined by Sarah Mitchell, CPA | Reviewed by: James Okafor, EA

Full Definition

The Collection Statute Expiration Date (CSED) is the 10-year deadline the IRS has to collect a tax debt, starting from the date the tax was assessed. Under IRC Section 6502, the IRS loses its legal authority to collect a tax debt after the CSED expires — the debt becomes legally uncollectible. However, certain events can extend (toll) the CSED: filing for bankruptcy (suspends the CSED for the duration of the bankruptcy plus 6 months); submitting an Offer in Compromise (tolled during OIC review plus 30 days); requesting a Collection Due Process hearing (tolled during CDP proceeding); residing outside the US for at least 6 months; and signing a waiver or agreement that extends the CSED. Businesses with old tax debt should always verify their CSED before making financial decisions.

Why This Matters for Businesses With Tax Debt

Understanding Collections Statute Expiration Date (CSED) is essential for any business owner navigating IRS enforcement. This term directly affects the options available for resolving business tax debt — including whether tax debt financing is available, how lien subordination works, and what enforcement the IRS can take.

Related Terms

Offer in Compromise, Collection Due Process, IRS Statute of Limitations

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Type of Tax Debt *-- Select Tax Debt Type --IRS 941 Payroll Tax DebtFederal Tax LienIRS Bank Levy (Active Now)Trust Fund Recovery Penalty (TFRP)State Tax DebtOIC Bridge FinancingMultiple Types

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Sources: IRS.gov; Internal Revenue Code (IRC); IRS Publication 594 (The IRS Collection Process); IRS Publication 1 (Your Rights as a Taxpayer). Tax Funds is a financing marketplace — not a lender, CPA firm, or law firm. This content is for informational purposes only.