IRS 3-year Rule

[MGRANA]

After the IRS audited me, I put in for an appeal. By the time the appeal was over and I entered into a settlement with the IRS, 9 months went by. My question: Does this toll the 3-year rule, if so, by how much: 9 months also, 9 months + 30 days, 9 months + 60 days ?

I have also heard that some BK districts have different rules on IRS waiting periods ? is this true ?

[justbroke]

After the IRS audited me, I put in for an appeal. By the time the appeal was over and I entered into a settlement with the IRS, 9 months went by. My question: Does this toll the 3-year rule, if so, by how much: 9 months also, 9 months + 30 days, 9 months + 60 days ?

Yes, it was tolled. I think most of this from from 11 USC 507 and 11 USC 105(a), although it's not particularly explicit. I believe it would toll for the entire period of time you were in appeal. If you're in the 11th Circuit as I am, this is pretty much precedence now as the Circuit looked at it. I was looking at this because I did, in fact, have trouble with a wrongly filed 1099-A which caused me much grief and an unpaid tax bill. (The 9th and 10th Circuit also give full equitable powers to the Court in this regard on tolling, so it's the majority view.)

I have also heard that some BK districts have different rules on IRS waiting periods ? is this true ?

Not that I heard of. The majority seems clear, but I read some rumblings that the 5th Circuit may have ruled differently on tolling. The courts that have sided with the Government basically say that Congress intended to give every consideration to the Government especially when someone could avoid taxes using this process.

[HHM]

Correct, appeals effect the timeline. It is the time that the government could not collect (i.e. the pending appeal) PLUS 90 days.

Keep in mind, there are actually 4 rules when it comes to discharging tax debt
1. 3 year rule. 3 year from the tax return due date (extensions count).
2. 2 year rule. 2 years from when the tax return was "actually" filed.
3. 8 month rule. 8 months from assessment (this typically effects audits).
4. The no fraud rule.