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Does a Federal Tax Lien Expire?

Does a Federal Tax Lien Expire?

The IRS tax lien expires when your tax debt is no longer collectible. The general rule is that the IRS has ten years to collect delinquent taxes, but a number of events can extend this period.

Beginning the Collections Period

The IRS has ten years to collect taxes, beginning when the tax is assessed. Tax can be assessed when you file a tax return, but also later on if you didn’t file a return or if the IRS adjusted your return.

The period begins when the tax is assessed, not when the lien arises. The lien exists as soon as your tax payment is one day late. Later on, the IRS may file an official Notice of Federal Tax Lien to notify other creditors of the IRS interest in your property.

Extending the Collections Period

Many different actions can extend the ten-year collections period. Typically, these are actions taken by the taxpayer that temporarily prevent the IRS from collecting the tax debt. The time period when the IRS agrees not to seek collection is tacked on to the end of the collection period.

Your collections period could be extended if you take the following actions:

  • Filing for bankruptcy
  • Requesting an installment agreement
  • Submitting an Offer in Compromise
  • Asking for a Collection Due Process hearing
  • Requesting innocent spouse relief
  • Appealing certain IRS decisions or petitioning the Tax Court

The IRS can also ask to sign an agreement that extends the collections period. Always consult a tax attorney before signing one of these agreements—you may not want to sign it or you may be able to negotiate the terms of the extension.

Dealing With the Lien

The federal tax lien affects everyone differently. Some taxpayers with few valuable assets who are nearing the end of their collections period may just wait out the lien.

For others, the lien can cause major issues. If you need to sell or refinance your home, the tax lien can seriously impede your efforts. 

You may be able to request a lien discharge for a specific piece of property or a lien subordination if you negotiate with the IRS. Taxpayers who enter into certain types of installment agreements may also be able to request a withdrawal of the Notice of Federal Tax Lien.

Consult with a tax resolution attorney to develop a personalized plan for dealing with the IRS tax lien and resolving your tax debt issues.

Contact The Gartzman Law Firm to speak with an Atlanta tax lien attorney about your case. Request your consultation by calling (770) 939-7710.