In case you haven’t heard, the Internal Revenue Service (IRS) is responsible for collecting taxes from individuals and businesses in the United States. When a taxpayer fails to pay their taxes, the IRS may place a tax lien on their property as a way of securing payment. A tax lien is a legal claim on a taxpayer's property, including real estate, personal property, and financial assets.
Now, taxpayers like yourself may often wonder if IRS tax liens ever expire, and if so, when. Read on to discover more about the expiration of IRS tax liens today.
What is an IRS Tax Lien?
An IRS tax lien is a legal claim on a taxpayer's property that arises when the taxpayer fails to pay their tax liability. The tax lien attaches to all of the taxpayer's property, including real estate, personal property, and financial assets. The lien serves as a way for the IRS to secure payment of the taxpayer's tax debt. Once a tax lien is filed, the taxpayer's credit score may be negatively affected, and they may have difficulty obtaining credit or loans.
The Duration of IRS Tax Liens
Once a tax lien is filed, it remains in place until the taxpayer pays their tax debt in full or the lien is released. However, the IRS may release a tax lien if the taxpayer meets certain conditions. These conditions may include:
Payment in Full: If the taxpayer pays their tax debt in full, the IRS will release the tax lien within 30 days.
Offer in Compromise: If the taxpayer reaches an agreement with the IRS to settle their tax debt for less than the full amount owed, the IRS may release the tax lien.
Withdrawal: The IRS may withdraw a tax lien if it was filed in error, the taxpayer enters into a payment agreement with the IRS, or the IRS determines that withdrawing the lien will facilitate the collection of the tax debt.
Expiration of the Statute of Limitations: The IRS has 10 years from the date the tax liability is assessed to collect the tax debt. Once the 10-year period has expired, the tax debt is no longer enforceable, and the tax lien will be released.
Impact of IRS Tax Liens on Credit Scores
When the IRS files a tax lien against a taxpayer, it becomes a matter of public record. This means that the tax lien will appear on the taxpayer's credit report and may negatively impact their credit score. The presence of a tax lien on a credit report may make it more difficult for the taxpayer to obtain credit or loans. However, once the tax lien is released, the taxpayer's credit score may improve.
Options for Dealing with IRS Tax Liens
Taxpayers who have a tax lien filed against them have several options for dealing with the lien. These options may include:
Paying the Tax Debt in Full: If the taxpayer has the means to pay their tax debt in full, they should do so as soon as possible. Once the tax debt is paid in full, the IRS will release the tax lien within 30 days.
Offer in Compromise: If the taxpayer cannot afford to pay their tax debt in full, they may be able to reach an agreement with the IRS to settle their debt for less than the full amount owed. This is known as an offer in compromise.
Installment Agreement: Taxpayers who cannot afford to pay their tax debt in full may be able to enter into an installment agreement with the IRS. Under this arrangement, the taxpayer makes monthly payments to the IRS until the tax debt is paid in full.
Consulting with a Tax Professional: Taxpayers who are unsure of how to deal with a tax lien should consider consulting with a tax professional. A tax professional can help the taxpayer understand their options and navigate the complex tax laws and regulations.
Conclusion
Now that you finally understand more about IRS tax liens, you can know better and do better. It’s also worth noting that taxpayers who have a tax lien filed against them should consider consulting with a tax professional to understand their options and navigate the complex tax laws and regulations.
Do you need help with federal tax liens release? Advance Tax Relief LLC is here to help you with three decades of expertise and experience in tax law. Work with us today!
