This code section stipulates that the IRS has 10 years from the time tax is assessed to collect it. If they are unable to collect those amounts within 10 years, through whatever means they have available – such as garnishing your wages, placing a levy on your bank accounts, or a lien on your assets – the balance would be erased.
As a taxpayer who resides outside the United States, you may not be aware of outstanding federal tax liabilities or a tax lien – especially if the address on record for you is outdated or otherwise incorrect. Heck, you may not even have filed a tax return, but the IRS filed one on your behalf (known as a substitute tax return that is filed based on information reported by third parties, such as employers, banks, brokers, etc).
Why isn’t the IRS isn’t more understanding of the complex regulations they have set forth for Americans living and/or investing abroad and why isn’t there better information provided to understand compliance and reporting requirements? Expats are in a sense forced to fall out of compliance, as the time requirement to educate themselves and keep up with the changing regulations is too much of a burden, and often too complex to understand even if you have the time needed to attempt self study
What to do if you have not filed a US tax return in several years and live abroad.