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Federal Tax Lien Statute of Limitations

A fact that is not widely advertised by the Internal Revenue Service is the statute of limitations on Federal Tax Liens. The Federal Tax Lien Statute of Limitations is 10 years. This means that the Internal Revenue Service has 10 years to collect unpaid tax debts from you. After the 10 years expires, the IRS will wipe your tax debt clean and stop making attempts to collect the tax debts from you. Hearing this you may think that the best option is just to wait out the 10-year period owing tax debts and avoiding the IRS. Think again, unfortunately it is not that simple. The 10-year statute of limitations gives the IRS an advantage and is certainly not an ‘out’ for taxpayers that owe back taxes. It dissolves them of the time and expenditures of trying to reach you to get you to pay the taxes.

Consequences of Owing Back Taxes

During the ten-year period that you owe back taxes, the IRS will make attempts to get you to pay your taxes. They can garnish your wages, impose levies and place tax liens on your property. Your credit will be ruined, you will not be able to apply for a license, get a loan, buy a property or sell a property, and in some cases it could even pose a challenge to maintaining or obtaining employment. Put simply, you should not attempt to wait out the 10-year Federal Tax Lien statute of limitations. You should not ignore the IRS’s attempts to get you to pay your back taxes. You do not have to avoid their communications. You will inevitably receive a Notice and Demand for Payment from the IRS, letting you know that they are filing a lien against property that you own.

What are the Exceptions to the Statute of Limitations Expiring on Federal Tax Liens?

There are a few circumstances which may extend or suspend the ten years to collect statute of limitations. The IRS will extend the collection period if you enter into an installment agreement with them to pay the back taxes. Collection by the IRS can continue to take place until the 89th day after expiration of the installment agreement. Another situation in which the IRS may extend the statute of limitations expiration date is under the agreement in which they release a levy. The IRS requires that this extension be included in the agreement. It should be noted that there are IRS codes that also will result in extensions of the collection period statute of limitation expiration date. For instance, if the United States files suit against you and reduces the tax claim to judgement, then there is no expiration until the judgement is satisfied.

How Do I Get Rid of a Federal Tax Lien?

If you are facing a tax lien, then McCauley Law Offices, P.C. can help you with your tax problems. Paying your tax debt in full may seem like an insurmountable task, but we can help you each step of the way. First, you should realize that you have options, no matter what situation you find yourself in. Paying your tax debt, in full, is the best way to get rid of a federal tax lien against you. When you enter into negotiations and communication with the IRS additional options open up to your for reducing the impact of an existing lien. We can help you with tax lien removal.

Can I transfer Property and Get out of a Tax Lien?

After a federal tax lien is attached to a property, it remains attached to the property until the lien has expired, is released, or until the property has been discharged from the lien. The transfer of property subsequent to attachment does not affect the lien. If property is sold by the taxpayer, the lien attaches to whatever is substituted for it, as it reaches all of the taxpayer’s property and rights to property.

Are there any situations in which the IRS will suspend the Federal Tax Lien Statute of Limitations?

Yes, there are a few common situations in which the IRS will suspend the collection period. They are:

  • Issuance of a statutory notice of deficiency
  • In the event that the assets of the taxpayer are in control or custody of a court
  • If the taxpayer is outside of the United States for a continuous period of at least 6 months
  • an extension exists for the payment of an estate tax
  • a wrongful seizure of property or a wrongful lien on property
  • a taxpayer bankruptcy filing triggering the automatic stay

At McCauley Law Offices, P.C., our lawyers will find a solution to your tax problems, no matter how complex your IRS issue is. View our services and contact us (or call 610-388-4474) to schedule a free consultation with one of our tax attorneys. View and purchase Gregory McCauley’s published work “TAXJAMS: Simple Solutions” on Amazon. From our office in Chester County, Pennsylvania, we find tax solutions for clients throughout the country.

McCauley Law Offices can help!

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