When Do IRS Tax Liens Expire?

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The IRS can file a lien on your property as a penalty for unpaid tax debts.
The IRS can file a lien on your property as a penalty for unpaid tax debts. (Image: tax forms image by Chad McDermott from Fotolia.com)

A federal tax lien filed on your property is a serious problem and can feel suffocating. Liens don't last forever -- depending on when they were filed, they expire after six or 10 years -- but waiting them out isn't advisable, and if you can't simply pay off your tax debt, you should explore other avenues of managing your lien; nevertheless, you should be aware of the details of the lien's statute of limitations.

Tax Liens

If you owe taxes which you have not paid, the IRS may send you a notice of an impending federal lien on your property. If you do not pay your debt within 10 days of your receipt of the notice, the IRS will impose the lien, which will heavily affect your credit rating and will make selling property either very difficult or impossible.

Natural Expiration

Under the statute of limitations, the IRS can only maintain the lien for 10 years from the date you began owing them money if returns are filed on time. After 10 years have elapsed, the lien expires naturally and your property is no longer restricted. For liens filed before November 6, 1990, the expiration period is only six years.

Extension

Despite the 10-year limit, certain circumstances can extend the tax lien beyond this period: if you declare bankruptcy, submit an innocent spouse claim, or do anything else that legally prevents the IRS from collecting the debt, it disrupts the lien and enables the IRS to re-file it. This is one more reason -- besides the severe restrictions and damage to your credit from a lien -- simply waiting for the lien to expire is not a good strategy.

Withdrawal

If you can prove to the IRS that the lien was filed in error, or -- more vaguely -- that it would be in the "best interests" both of yourself and of the government to withdraw the lien, you can escape the lien before its expiration period has elapsed. The latter condition is determined by the Taxpayer Advocate. For information and assistance dealing with liens, contact the appropriate IRS Collection Advisory Group -- see "Resources" for a list.

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