P3-U09 · PART 3 · SOURCE CYCLE 2026-2027
Tax Payments and IRS Collections
Only cards whose complete question and answer were checked against exact primary-authority evidence appear here.
Q1.Absent an event that suspends or extends the period, how long is the IRS collection statute generally?
10 years. Publication 594 describes the collection statute expiration period as generally 10 years.
Q2.Tax was assessed on September 8, 2026, and no tolling event occurs. What is the general collection expiration date?
September 8, 2036. Applying Publication 594's general 10-year collection period gives September 8, 2036.
Q3.What is the exam-ready rule on general financial health (e.g., bankruptcy, lawsuits, garnishments, cash flow, assets, and insolvency)?
Collection analysis considers income, expenses, assets, equity, and other financial facts rather than one balance alone.
Q4.What official rule governs third-party research (e.g., property assessment for taxes, asset values, state and local tax information)?
Reliable third-party records can help substantiate ownership, values, income, and expenses in a collection matter.
Q5.Summarize the correct treatment of discharge of the tax liability in bankruptcy.
Bankruptcy can affect collection, but tax discharge depends on bankruptcy and tax-law requirements and is not automatic.
Q6.What common mistake should be avoided with the IRS Collection Financial Standards?
The IRS uses Collection Financial Standards when evaluating certain allowable living expenses and ability to pay.
Q7.State the controlling rule for extension of time to pay (e.g., Form 1127).
An extension of time to pay is distinct from an installment agreement and requires the applicable form and hardship showing.
Q8.What is the key limitation involving collection appeals program (e.g., denial of installment agreements, discharge applications)?
CAP provides administrative review for specified collection actions, but does not provide Tax Court review of the CAP decision.
Q9.What common mistake should be avoided with collection notice and Notice of Federal Tax Lien?
A Notice of Federal Tax Lien publicly alerts creditors to the government's legal claim against a taxpayer's property after the lien arises.
Q10.What threshold rule applies to levy and seizure of taxpayer's property?
A levy is a legal seizure of property or rights to property after required collection procedures and notices.
Q11.How does current authority treat currently Not Collectible (e.g., reasons and reactivation)?
Currently-not-collectible status generally pauses active collection when payment would cause hardship, but the debt, interest, and possible liens remain.
Q12.What should a representative verify about the IRS Collection Summons (e.g., purposes)?
An IRS summons can compel testimony or production of records relevant to determining or collecting tax.