The statute of limitations on the collection of unpaid federal payroll taxes is 10 years. The clock will begin on the date your payroll tax return is filed, which is also the date that the tax is assessed.
When you file your payroll tax return late, your statute will also start late. This means that if you file your 2020 payroll return in 2022, your collection statute will run until 2032 instead of 2030.
Many federal payrolls have to be submitted quarterly, meaning there are quarterly statute limitations, and a separate statute applies for each unpaid quarter. When a person fails to file a payroll tax return, the IRS can perform its own substitute tax assessment under IRS section 6020(b).
In such cases, the 10-year collection period will begin on the date the IRS assesses the 6020(b) balance. Such substitute assessments are based either on payroll tax information previously provided on a tax return or payroll tax information comparable to other companies within the same industry.
Many 6020(b) assessments are typically inaccurate. A person can adjust 6020(b) assessments by filing their own payroll tax returns for the periods assessed by the IRS, but this will also restart the collection statute to begin as of the date you file an original return.