Every tax debt has an expiration date. The IRS calls it the Collection Statute Expiration Date, or CSED. A wage levy, as continuous as it is, cannot run past it. If you have been levied for years, knowing your CSED for each tax year on the levy may be the most valuable fact in your file.
The basic rule
IRC 6502(a)(1) says a properly assessed tax may be collected by levy or by a court proceeding, but only if the levy is made or the proceeding begun within 10 years after the assessment. That 10-year window is the collection statute.
For wage levies, the regulation adds a specific rule. Treasury Regulation 301.6343-1(b)(1)(ii) says a continuing levy on salary or wages under IRC 6331(e) “must be released at the end of the period of limitations in section 6502.” IRM 5.11.2.3.1.2 repeats it: a continuous wage levy served before the expiration of the collection statute must be released upon its expiration.
That is different from other levies. The same IRM section explains that a levy on a fixed and determinable right to future payments, such as certain pension or benefit payments, does not have to be released when the statute expires if it was served in time. Wage levies get the more protective rule.
Each tax year has its own clock
The 10 years run from each assessment, so a levy listing several tax years usually has several CSEDs. When the statute expires on one year, that year should come off the levy while the others continue.
IRM 5.11.2.3.4 describes this with an example. A wage levy covers five tax modules totaling $40,000. The collection statute expires on the largest period, reducing the balance by $30,000. The IRS sends the employer a Form 668-D stating the remaining $10,000 owed and noting that the expired period is released from the levy.
IRM 5.11.5.6.3 adds that when the IRS monitors a wage levy, it releases the levy when the last CSED is about to expire, far enough in advance that no payments are received for wages earned after the expiration.
What pauses the clock
The 10 years are not always 10 calendar years. Certain events suspend the statute. Among the ones that matter most in wage levy cases:
- A timely CDP hearing request. IRC 6330(e)(1) suspends the collection statute while the hearing and any appeals are pending, and provides that the period will not expire before the 90th day after a final determination.
- A pending offer in compromise. IRC 6331(k)(3) applies rules similar to IRC 6331(i)(5), suspending the statute while the levy bar for a pending offer is in effect.
- A pending installment agreement request. The same IRC 6331(k)(3) applies to the period a proposal is pending, the 30 days after rejection or termination, and any timely appeal. It expressly excludes the period while an agreement is actually in effect.
- Bankruptcy. IRC 6503(h) suspends the collection period while the IRS is prohibited from collecting because of the bankruptcy case, plus six months. See wage levies and bankruptcy.
- A request for relief from joint liability. IRC 6015(e)(2) suspends the statute while collection is barred under IRC 6015(e)(1)(B), plus 60 days.
A taxpayer can also agree in writing to extend the period in connection with an installment agreement, under IRC 6502(a)(2). Read anything you sign.
Finding your CSEDs
The IRS tracks the CSED for each tax period. You can ask for it. Your account transcripts show the assessment dates, and the IRS can confirm the computed CSED, including suspensions. Ask for the CSED for every period on your levy, in writing if possible.
Then compare. If one or more years are within a short time of expiring, that changes the strategy.
How the CSED changes the strategy
Near the end
If the CSED is close, actions that suspend the statute have a cost. A new offer in compromise, for example, would extend the time the IRS has to collect. That does not make those options wrong, but it is a trade-off to weigh before you file anything.
IRM 5.11.5.6.2 notes that if fewer than 18 months remain before the CSED, a continuous wage levy must be monitored manually rather than systemically. The IRS pays closer attention near the end. So should you.
Far from the end
With many years left, waiting is not a plan. The levy can keep collecting for years. Work the release grounds: an installment agreement, hardship release or CNC status.
An example
Maria’s wage levy lists three years. The IRS assessed the first in October 2016, the second in November 2018 and the third in June 2021. With no suspensions, the first year’s collection statute would run in October 2026, the second in November 2028 and the third in June 2031.
But Maria requested a timely CDP hearing on the 2018 assessment that lasted seven months, which suspends that year’s statute for the time the hearing was pending under IRC 6330(e)(1). And she submitted an installment agreement proposal that sat pending for two months before it was rejected, which IRC 6331(k)(3) treats as a suspension period too, along with the 30 days after rejection. Her actual dates are later than the simple math suggests. That is why you ask the IRS for its computed CSED for each year rather than counting on your own arithmetic.
When the first year expires, the levy balance should drop by that year’s amount, with a Form 668-D to her employer reflecting the change. The levy continues for the other two years until they are paid, released on another ground, or expire.
A levy that runs past the CSED
If wages are still being sent to the IRS after the CSED for every period on the levy, that is a levy the regulation says must be released. Ask for an immediate release, and ask for return of amounts collected after the statute expired. A refund claim for amounts paid after the statute runs is a separate procedure, and timing matters. See getting levied wages back.
The lien ends too
When the liability becomes unenforceable by lapse of time, IRC 6322 says the federal tax lien ends as well. See wage levy vs. federal tax lien.
My firm has a broader guide to the IRS collection statute of limitations.
Every year on your levy has an expiration date. Learn them. The IRS already knows them.