How Long Does a Lien on Your Property Last?

When you owe taxes to the IRS, one of their options for collecting on that tax is to place a lien on your property, which can include real estate. This can limit your financial freedom and allows the government to take the proceeds of any sale. So how long does a lien on your property last? An experienced lien resolution lawyer could answer that question and discuss possible ways to get it withdrawn.

Is There an Expiration on IRS Tax Liens?

The IRS has a statute of limitations for collecting on back taxes. The statute is 10 years, subject to tolling events, such as filing for bankruptcy, a collection due process hearing, submitting an offer in compromise, or a pending installment agreement. It would restart later and that would effectively act as an extension. For more information, taxpayers can see Internal Revenue Code § 6502.

In the case of a tax lien from the city of Washington DC itself, the collection period could be extended by both the mayor and the taxpayer in writing. If there was a notice of proposed audit changes, that would extend it for another 90 days, or an issuance of a proposed assessment would add another six months onto that 10-year collection for DC taxes.

Why Is It So Hard to Get a Federal IRS Lien Removed From Public Records?

It is a challenge to get federal IRS tax liens removed from public records because the removal would make it harder to collect the balance due from third parties, like the buyer of the taxpayer’s home. By keeping that notice in the public, it increases the chance that if a taxpayer does not pay these other creditors, they will be on notice that the IRS has a legal right to receive the payment for the asset sales instead of the taxpayer.

The IRS does not automatically remove the notice of federal tax liens once they are released. A taxpayer might want to have the federal lien removed from public records if they have a certain job where it could make them look bad. They need to complete a Form 12277, Application for Withdrawal for Final Notice of Federal Tax Lien, and look at Internal Revenue Code § 6323(j), Withdrawal of Notice in Certain Circumstances. They would need to show that either:

The lien was filed prematurely or not in accordance with IRS procedures
An installment agreement would satisfy the lien
The withdrawal of the lien would facilitate the collection of the underlying tax liability
Withdrawal (which is to say the removal of the tax lien) is in the best interest of the United States government and the taxpayer

Getting a lien removed from public records is possible but you may need the assistance of a tax lawyer to do so.

How Can a Lawyer Help Resolve a Property Lien?

At Pontius Tax Law, we dedicate ourselves to helping you navigate your tax controversy and maintain compliance with the IRS. A lawyer could help you resolve a lien by reviewing:

The balance due and the collection statute expiration date
Your ability to repay the IRS, which is usually done in Form 433.
The collection alternatives like installment agreements, offer in compromise, and Currently Not Collectible status
Lien resolution options, which include discharge, subordination, and withdrawal

For answers to questions regarding how long a lien attaches to your property, schedule a consultation with us.