Extending the 

Tax Assessment 

Period

Background

The Internal Revenue Service (Service) makes every

effort to examine tax returns as soon as possible after

they are filed. To ensure timely tax examinations,

Congress has set deadlines for assessing taxes and

making refunds or credit of tax. These deadlines 

are called “statutes of limitations.” Without statutes 

of limitations, a tax return could be examined and 

tax assessed, refunded, or credited at any time,

regardless of when the return was filed.

Assessment statutes of limitations generally limit 

the time the Service has to make tax assessments 

to within three years after a return is due or filed,

whichever is later. The Service cannot assess

additional tax after the time for assessment has

expired under any statute of limitations (even if the

Service discussed the need for a tax adjustment with

you before the expiration). Statutes of limitations 

also limit the time you have to file a claim for credit 

or refund. The Service is legally prohibited from 

making a refund or credit for your claim if you file it 

after the time for filing has expired under the statute 

of limitations. Also, if you disagree with the return 

examination findings, we cannot provide you with 

an administrative appeal within the Service unless 

sufficient time remains on the statute of limitations. 

Because of these restrictions, the Service identifies 

tax returns under examination for which the statutory 

period for assessment is about to expire and 

requests that you extend the assessment statute of 

limitations. This additional time allows you to provide 

further documentation to support your position, 

request an appeal if you do not agree with the 

examiner’s findings or to claim a tax refund or credit. 

The extended assessment statute allows the Service 

time to properly complete the examination of the tax 

return and to make any additional assessment or 

reduction in the previously assessed tax liability that 

is required.

Publication 1035

Publication 1035 (Rev. 9-2017) Catalog Number 46890Q Department of Treasury Internal Revenue Service

Congress, recognizing that additional time may

sometimes be needed to fairly resolve a tax

examination, has provided for extending the statutory

period by written agreement between you and the

Service. These agreements are called “consents” 

and generally apply to all taxes except estate tax. To

provide consistency, the Service has developed forms

for the written consents. The signed consent form is

considered to be binding on you and the Service.

There are two basic kinds of consents: the fixeddate consent and the open-ended consent. The 

fixed-date consent sets a specific expiration date for 

the extension of the statute, while the open-ended 

consent extends the statute for an indefinite length of 

time.

Length of Extension

The Service’s examiners will request an extension

period no longer than is necessary to complete the

examination and any administrative action necessary 

to process your case. As stated above, the Service

uses two kinds of consents to accomplish this, a

“fixed-date” and an “open-ended” consent.

Fixed-date consents expire on the date specified in 

the consent. Once the original date under the statute 

of limitations is extended by a signed consent, it may 

be further extended by the mutual agreement of the

parties before the expiration date of the previous

extension period. The fixed-date consent is used for

most examination and appeal activities. The principal

forms used are Form 872, Consent to Extend the 

Time to Assess Tax, Form 872-B, Consent to Extend 

the Time to Assess Miscellaneous Excise Taxes, or 

Form SS-10, Consent to Extend the Time to Assess

Employment Taxes.
In an open-ended consent, the extension period

generally remains open until 90 days after either the

taxpayer or the Service sends the prescribed notice

ending the agreement. The procedures for using this

consent are set forth in Revenue Procedure 79-22,

1979-1 C.B. 563, which may be obtained by calling 

the Internal Revenue Service at 1-800-829-1040 if 

the tax return being examined is one of the Form 

1040 series of returns (for example, Form 1040, 

Form 1040A, Form 1040EZ) or 1-800-829-4933, 

if any other type of return is being examined. The 

open-ended consent may be used for cases placed in 

suspense, scheduled for appeals or other situations 

where it would be advantageous to both you and the 

Service to do so.

Form 872-A, Special Consent to Extend the Time to

Assess Tax, is used for agreeing to an open-ended

assessment period. However, Form 872-A may not be

used for employment taxes or certain miscellaneous

excise taxes.

Restricted Consents

In addition to extending the length of the assessment

statutory period, consent agreements may also limit

further examination or appeal activities to specific 

tax issues. These agreements are called “restricted

consents” and have either a fixed or open-ended 

date of expiration. It is the Service’s position that the

taxpayer has a right to request a restricted consent;

however, as a general rule, the Service will not enter

into restricted consents unless all of the following

conditions exist:

1) The number of unresolved issues that must

be covered by the restricted consent does not

make it impractical to do so.

2) The scope of the restrictions must be 

clearly and accurately described for all the

unresolved issues.

3) The issues not covered by the restricted

consent are agreed and provision is made 

for assessing any deficiency or employment 

tax liability or, under certain circumstances, 

scheduling any over- assessment (refund or 

credit) for the agreed issues.

4) The appropriate Service official approves 

the use of a restricted consent.

5) The terms and language in the restricted

consent are approved by IRS Counsel prior 

to the consent being signed by the parties.

A restricted consent is used to allow the assessment

statute to expire on the normal or previously 

extended statute expiration date with regard 

to items on the return except those covered by 

the restrictive language. The consent should be 

prepared by the Service, and not by the taxpayer 

or the taxpayer’s representative. The restrictive 

statements are to be typed on the consent form 

to ensure legal validity and to ensure you and 

the Service are aware of any restrictions. If 

the restrictions will not fit on the consent form, 

a reference will be made on that form to an

attachment. The Service office examining your 

return is responsible for preparing the restrictive 

language and must obtain approval of IRS Counsel 

as to its legal sufficiency. If you wish to add or 

amend restrictions to a consent form submitted to 

you for your signature, please discuss your request 

with the Service employee requesting the consent 

and the Service generally will prepare a new 

consent form.

Your Available Options

When asked to sign the consent extending the

statutory period, you have three options with rights

and alternatives for each. You have the right to:

● Sign an unconditional consent (a fixed-date 

or open-ended consent that does not limit 

the examination or appeal activities to specific

issues). This provides the Service the same

assessment authority and you the same appeal

opportunities as available under the original

statutory period of limitations.

Please note that the Service may examine any

issues relevant to your tax return and make any

required tax assessment during the extended

statutory period.

● Negotiate consent terms. The Internal 

Revenue Code does not specify the length 

of the extension period, or the extent of 

examination or appeal activities. This flexibility 

allows you and the Service to negotiate the tax 

issues covered by the consent and/or the length 

of the extension period. During any discussions, 

factors such as the number, type and difficulty of 

issues, whether issues that are not covered by 

the consent are agreed, etc., will be considered. 

Both you and the Service must agree to the 

terms of the consent and sign the consent form 

before it becomes effective.
● Refuse to sign the consent –Taxes other 

than certain employment taxes and certain 

miscellaneous excise taxes. If you choose not 

to sign the consent, we will take steps that will 

allow us to assess any tax we determine to be 

due. These steps begin with the issuance of a 

formal notice (see Notice of Deficiency, below, or 

Notice of Employment Tax Determination Under 

IRC §7436, below, for explanation). This notice 

neither requires that you make an immediate 

payment, nor that you immediately take your 

case to the Tax Court. The notice gives you 90 

days (150 days if the notice was addressed to 

a person outside the United States) to either 

agree to the deficiency or employment tax 

liability, or file a petition with the United States 

Tax Court for a redetermination of the proposed 

deficiency or employment tax liability.

If you petition the Court, you will generally 

have the opportunity for a pretrial settlement. If

agreement cannot be reached, the case will 

be heard in court. Whether or not you signed 

a consent to extend the assessment statute of

limitations will have no bearing on who has the

burden of proof in any court proceeding.

If you don’t agree and don’t file a petition during

the 90-day or 150-day period, the amount shown

in the Notice of Deficiency or Notice of Employment 

Tax Determination Under IRC §7436 will be 

assessed and you must make arrangements for 

payment. Under no circumstances will a penalty 

be charged for not signing the consent to extend 

the assessment statute of limitations.

As an alternative, you can pay the disputed

amount of tax and file a claim for refund. The

claim must be filed within the period of limitations

for filing claims; however a timely filed claim can

be examined, reviewed, and appealed after the

period for filing claims has expired. Of course, if

you wish, you can take your case to the United

States District Court or the United States Court 

of Federal Claims within the period specified 

by Internal Revenue Code Section 6532. That

section requires that you wait at least six months

after filing your claim with the Service before you

may file suit, and also requires you to file the suit

within two years of receiving a notice that your

claim has been disallowed.

Refuse to sign the consent – Certain employment 

taxes and certain miscellaneous excise taxes. If 

you choose not to sign the consent extending the

period of limitations for certain employment taxes or

certain miscellaneous excise taxes, we will normally 

assess the tax. Generally, your only recourse is to 

pay the tax when assessed. You may then file a claim 

for refund within the applicable statutory period of 

limitations, and upon our disallowance of the claim 

or six months from the date the claim is filed, file suit 

in a United States District Court or the United States

Court of Federal Claims. A refund suit must be filed 

no later than two years from the date of the mailing 

by the Service of the notice of claim disallowance, 

unless you and the Service agree in writing to extend 

the period for filing suit. Form 907, Agreement to 

Extend the Time to Bring Suit, is generally used for 

this purpose. (Note, however, that if you execute a 

written waiver of this notice requirement, the twoyear period runs from the date the waiver is filed. A 

waiver is generally executed on Form 2297, Waiver 

of Statutory Notice of Claim Disallowance). We will 

consider a claim for abatement of the assessment 

of c e r t a i n employment taxes or certain 

miscellaneous excise taxes if a jeopardy assessment 

(see jeopardy assessment, below) is involved or 

you establish a meritorious reason for the Service to 

consider the claim for abatement.

Additional information concerning your appeal rights is

contained in Publication 556, Examination of Returns,

Appeal Rights, and Claims for Refund. Appeal

procedures for adverse determinations in Tax Exempt

and Government Entities Division cases are explained

in Publication 1020 and Publication 892. Copies of 

the publications and notice are available from the 

Internal Revenue Service, free of charge, by calling 

1-800-829-3676.

Notice of Deficiency

If the Commissioner determines there is a deficiency 

of income, estate, gift, or certain miscellaneous 

excise taxes, the law authorizes the Commissioner 

to send notice of such deficiency to the taxpayer 

by certified or registered mail. Certain Service 

officials are authorized to issue these notices for the 

Commissioner of Internal Revenue. The notice is 

not an assessment of tax. It is a proposed deficiency 

and gives you 90 days (150 days if the notice was 

addressed to a person outside the United States) to 

either agree to the deficiency or file a petition with the 

United States Tax Court for a redetermination of the 

deficiency. Once the notice of deficiency is issued, 

the 90 or 150-day period cannot be suspended or 

extended. The notice of deficiency can be rescinded 

under certain circumstances if both parties agree.
Notice of Employment Tax 

Determination Under IRC § 7436

If the Commissioner makes a determination of certain 

employment tax issues (worker classification and/

or section 530 determinations), the Commissioner 

may send a Notice of Employment Tax Determination 

Under IRC § 7436 to the taxpayer by certified 

or registered mail. Certain Service officials 

are authorized to issue these notices for the 

Commissioner of Internal Revenue. The notice is 

not an assessment of tax. It is a proposed liability of 

employment tax and gives you 90 days (150 days 

if the notice was addressed to a person outside the 

United States) to either agree to the proposed liability 

or file a petition in the United States Tax Court for a 

redetermination of the issues contained within the 

notice. Once the notice is issued, the 90 or 150-day 

period cannot be suspended or extended. Neither 

can the notice be rescinded once it is issued.

Jeopardy Assessment

Jeopardy assessments are made when the 

Service believes that collection of a proposed 

deficiency or employment tax liability will be

endangered if we follow our regular procedures 

(see Internal Revenue Code Sections 6861 

and 6862). Jeopardy assessments are used 

sparingly and only when necessary to protect the 

government’s interest. Each jeopardy assessment 

must receive the approval of a designated Service 

official. In addition, written approval from IRS 

Counsel (or delegate) is required.

Jeopardy assessments will be made only if one or

more of the following conditions exist:

1. The taxpayer is, or appears to be, planning to

depart the United States quickly or to conceal

himself/herself;

2. The taxpayer is, or appears to be, planning to

place his/her property (including retirement plans) 

beyond the reach of the government by removing 

it from the United States, concealing it, dissipating 

it, and/or transferring it to another person; or

3. The taxpayer’s financial solvency is or appears to 

be imperiled. (This does not include investigations 

where the taxpayer becomes insolvent by the 

accrual of the proposed assessment of tax, 

penalty, and interest.)

The Service will promptly consider a taxpayer’s written

request for administrative review of the decision 

that collection of the tax was in jeopardy, or that the

amount of the assessment was excessive.

Note: Jeopardy assessments are not made because

the period of limitations for assessing the tax is about

to expire or because a taxpayer does not consent to

extend the statutory period, unless the collection of 

the tax deficiency or proposed employment tax liability is 

in jeopardy for the reasons described above.

Interest

Generally, interest continues to accrue on any balance

due until full payment is made, including the time for

appeal within the Service or the courts. However, 

for individual taxpayers, interest on an income tax

deficiency will stop accruing under certain conditions

after 18 months (36 months if the Service notifies you

of the additional tax liability after November 25, 2007)

from the later of the return due date or the date of 

filing if filed under a valid filing extension and will start

accruing again if payment is not timely made after 

the Service notifies you of the additional tax liability. 

Also, a cash deposit may be made to stop the accrual 

of interest. For information on cash deposits, please

contact the Service employee requesting the consent.

Summary

This publication gives general information about the

consent process and options available to you should

the Service ask you to extend the statutory period of

limitations. Specific questions should be addressed to

the Service employee requesting the consent.