Definition
A statute of limitations is a law that establishes the maximum time after an event within which legal proceedings may be initiated. When the period specified in a statute of limitations passes, a claim can no longer be filed, or if it is filed, it may be subject to dismissal. These time limits are designed to ensure legal disputes are resolved within a reasonable time frame, providing certainty and closure for all parties involved.
Examples
- Personal Injury Claims: Many jurisdictions require that personal injury lawsuits be filed within a certain number of years (often two to three years) from the date of the injury.
- Breach of Contract: Breach of contract claims typically need to be filed within a prescribed period, such as four to six years, from the date the breach occurred.
- Tax Assessment and Collection: According to U.S. tax law, the IRS generally has three years from the due date of a tax return to assess additional tax or collect a tax. This period can be extended under specific circumstances, such as if the taxpayer agrees to it or if there is a significant omission of income.
Frequently Asked Questions
How long is the statute of limitations for IRS tax assessments?
Generally, the IRS has three years from the due date of the return or its filing date, whichever is later, to assess additional taxes or collect taxes. This can be extended for material omissions or through mutual agreement between the taxpayer and the IRS.
What happens if I don’t file my tax return on time?
If a tax return is not filed, the statute of limitations for assessing additional tax does not begin to run. The IRS can pursue unpaid taxes indefinitely until the return is filed.
Can the statute of limitations be extended?
Yes, the period can be extended by mutual agreement between the taxpayer and the IRS. It is also extended in situations involving material omissions or fraudulent returns.
Are statutes of limitations the same for all types of legal actions?
No, statutes of limitations vary significantly depending on the type of legal action and jurisdiction. For instance, different time limits apply to personal injury claims, contractual disputes, property claims, and criminal prosecutions.
What if I discover a claim after the statute of limitations has expired?
In most cases, once the statute of limitations has expired, the legal claim can no longer be pursued. However, there are some exceptions where the clock can be “tolled” or paused under specific circumstances, such as cases involving fraud or minority.
Related Terms
- Tolling: A legal doctrine that allows for the pausing or delaying of the running of the statute of limitations under certain circumstances.
- Discovery Rule: A legal principle that delays the commencement of the statute of limitations period until the injured party discovers or reasonably should have discovered the harm.
- Equitable Tolling: A legal principle allowing a plaintiff to avoid the bar of an expired statute of limitations if they were prevented from filing in time due to extraordinary circumstances.
Online References
- Internal Revenue Service - Statute of Limitations on Collection
- Nolo - Statutes of Limitations
- Legal Information Institute - Statute of Limitations
Suggested Books
- “Principles of Statutory Interpretation” by G.P. Singh
- “Time and Tax: Issues in International, EU, and Constitutional Law” by Dominic de Cogan (Editor)
- “Federal Taxation: Basic Principles” by TAMBA-LUNGA Stephen
Fundamentals of Statute of Limitations: Legal Basics Quiz
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