Statute of Limitations on Collections in Texas

If you're a Texan with tax liabilities, there's a term you should be familiar with—the statute of limitations on collections. This critical piece of legislation governs the time limits for tax authorities to legally pursue the collection of unpaid taxes. It's essential for individuals and businesses alike to understand this rule, as it can greatly impact your financial planning and obligations. In this blog post, I'll delve deep into the nuances of the statute of limitations on collections in Texas, equipping you with the knowledge you need to make informed decisions about your tax situation.

At Melissa L Ellis, PC, I believe in empowering my clients with knowledge. That's why I offer a free consultation to discuss your case. During this session, I'll provide advice on your available options, helping you understand the best course of action given your unique circumstances. Together, we can work toward the most favorable outcome so you can move on and move forward.  

If you live in or around the San Antonio, Texas, area and are interested in scheduling a consultation, reach out to me today at Melissa L Ellis, PC. 

Understanding the Statute of Limitations 

Let's start by breaking down what the statute of limitations on collections really means. In simple terms, it's the period during which the Texas Comptroller or the Internal Revenue Service (IRS) can lawfully chase you for unpaid taxes. In Texas, this period is generally ten years from when the tax liability was assessed. So, if you have an outstanding tax debt, the authorities have a decade to take legal action against you to collect that debt.

Now, does that mean you're off the hook after ten years? Not exactly. Although the tax authorities lose their legal right to collect the debt after the statute of limitations expires, it doesn't mean your tax liability vanishes. You're still responsible for the debt; the authorities just can't take legal action to enforce collection. 

Exceptions to the Rule 

While the ten-year rule generally applies, there are some exceptions that can either extend or suspend the statute of limitations. These exceptions can keep the clock from running out for the tax authorities, allowing them to pursue collections beyond the ten-year timeframe.

One such exception comes into play when a taxpayer files for bankruptcy. When you file for bankruptcy, an automatic stay is put into effect, which stops all collection activities, including the running of the statute of limitations. The clock on the statute of limitations is paused during the bankruptcy proceedings and only resumes once the case is closed or dismissed. 

Another exception relates to tax liens. If the tax authorities slap a lien on your property, the statute of limitations is put on hold until the lien is released or becomes unenforceable. This means that the ten-year clock stops ticking as long as the lien is in effect. 

Navigating Agreements With Tax Authorities 

It's also worth noting that entering into certain agreements with the tax authorities could extend the statute of limitations. For instance, if you agree to an installment payment plan or an offer in compromise, the statute of limitations may be extended to accommodate the terms of the agreement.

Understanding the ins and outs of the statute of limitations on collections in Texas is crucial for managing your tax liabilities effectively. By familiarizing yourself with these rules and exceptions, you can make informed decisions and potentially avoid unnecessary legal complications. 

However, if you have any concerns about your tax debt and the statute of limitations, it's always a good idea to consult with a qualified tax attorney who can provide personalized guidance based on your unique circumstances. 

Negotiating Resolutions 

My firm aims to negotiate resolutions for clients facing tax collection issues. If you've been hit with a government tax lien, for example, I can step in to negotiate on your behalf. My goal is to reach an agreement that satisfies all parties involved, potentially saving you from further legal complications. 

I have a strong track record in handling cases involving Offer in Compromise, which could be a viable solution if you're unable to pay your full tax liability. By negotiating an Offer in Compromise, we may be able to reduce your tax debt, giving you the financial relief you need. 

Seek Trusted Legal Guidance 

Whether you're in Houston, Austin, Dallas, or McAllen, my team is ready to assist. We've successfully served clients throughout Texas, and we're committed to providing the same high-quality service to you as well. 

Dealing with the statute of limitations on collections in Texas can be a challenging process, but you don't have to face it alone. With Melissa L Ellis, PC by your side, you'll have a team of experienced professionals ready to guide you every step of the way. So why wait? Let's start discussing your case today.