Elena filed her Form 1040, U.S. Individual Income Tax Return, for the 2006 taxable year on...

Elena filed her Form 1040, U.S. Individual Income Tax Return, for the 2006 taxable year on April 15, 2007. On May 15, 2007, the IRS assessed the $10,000 of tax reported by Elena on her 2006 Form 1040. Elena did not make any mistakes on her 2006 Form 1040; however, Elena did not pay the $10,000 tax liability reported on the Form 1040. On January 2, 2010, the IRS filed a Notice of Federal tax Lien against Elena, which attached to all Elena's property. On January 8, 2010, Elena requested for a Collection Due Process hearing before the IRS's Appeals Office. The Appeals Officer ruled against Elena, and Elena did not petition any court to review the Appeals Officer's determination. Assume that the Collection Due Process hearing process ended on February 10, 2010. Question: when did the statute of limitations on collection of Elena's 2006 income tax liability expire?

June 16, 2015.

April 15, 2017.

May 18, 2017,

June 17, 2017.

None of the above.

Expert Solution

Given, Elena filed her form 1040, U.S. individual Income tax return for the 2006 tax payable year on April 15, 2007. BUt didnot pay the Income tax of $10,000. IRS filed a notice of federal tax lien against elena which attratcted elena's property.

On january 8 2010 Elena requested for a collection due processing hearing before IRA's appeals Office.

Usually, when a tax of $10,000 or more is not paid, the statutory limitation on such collection is for 10 years from the date when the IRS assess your tax liabilities.

The Actions taken by the tax payers will differ in the Statute of limitations.IF the tax payers requests for collection due proess hearing , the IRS suspends the statute of limitation at the time of hearing. This rule applies if the collection due process hearing request is made within 30 days of levy.

In the given situation, Elena requested for collection due process hearing request within 30 days of levy. So, the suspension of Statutory limitation applies to elena.

So, the Income tax epiration will be 10 years from the Date on which the taxes are assessed + period of hearing

10 years from may 15 2007 will be May 15 2017 and period of hearing is 32 days.

Hence the Income tax liability will expire on June 17, 2017.

Hence option June 17, 2017 is correct while other options are incorrect

ekkarill92 answered 2 years ago

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