Tax

IRS Tax Lien After 10 Years: Can They Refile?

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If you have been hit with a federal tax lien, understanding the implications and the 10-year statute of limitations on liens is crucial. Can the IRS refile a tax lien against you after this period? This article delves into the complexities of federal tax liens, how they work, when they expire, and the circumstances under which they can be refiled.

IRS Tax Lien After 10 Years: Can They Refile?

Understanding Tax Liens

A federal tax lien is a legal claim by the government against your property when you fail to pay your taxes. The lien ensures that if and when you sell your assets, such as real estate or vehicles, the government will receive payment for any back taxes owed.

The 10-Year Statute of Limitations

The IRS has a 10-year limit to collect back taxes from the date they assess your taxes, including if a tax lien is issued. This date is known as your CSED or Collection Statute Expiration Date. After the 10-year statute of limitations on collections expires, the IRS is required to release the lien.

Self-Releasing Aspect

The IRS inserts language into the lien that makes it “self-releasing.” That means it is automatically released when the 10 years is up. This “self-releasing” aspect of a tax lien is right on the face of the lien.

Extending the Collection Period

In cases where the collection statute is longer than 10 years, the IRS can extend the life of the lien by refiling it to match the longer collection period. Actions like submitting an offer in compromise, filing bankruptcy, or submitting a collection due process appeal can extend the time the IRS has to collect.

Expired NFTLs

When an NFTL (Notice of Federal Tax Lien) expires after ten years and is not renewed or refiled by the IRS within this period of time, it becomes invalid under IRC Section 6325(a). However, the underlying debt still exists, and the taxpayer remains responsible for paying down their outstanding liability.

Impact on Credit Scores

Although liens may no longer be enforceable once they expire, there may still be public record information available about these filings, which could impact credit scores or loans applications.

Can They Be Refiled?

In some circumstances, the IRS can refile a tax lien on your property. When the 10-year statute of limitations has expired, and the NFTL is not renewed or refiled within that time frame, it loses its priority status.

Reasons for Refiling

The IRS can refile a tax lien for reasons such as a new assessment, lien release or expiration, acquisition of new assets, or legal actions.

Refiling Timeframe

The IRS has a specific timeframe to refile a lien, typically 30 or more days before the original tax lien expires. If this happens, the lien renews for an additional 12 months beyond the 10-year CSED date.

Final Thoughts

While having an IRS tax lien against you may seem like an insurmountable obstacle, understanding how they work and their associated timelines can help you plan for resolution. Taxpayers should always assume that their tax debt remains fully collectible until paid off in full.

FAQs

Can the IRS refile a tax lien after 10 years?

Yes, under certain circumstances, the IRS can refile a tax lien after the initial 10-year period has expired.

How long does an unpaid tax lien stay on my credit report?

An unpaid federal tax lien can remain on your credit report indefinitely until it is paid in full.

What is the impact of an IRS tax lien on my credit score?

An unpaid or partially paid federal tax lien can have a significant negative impact on your credit score.