How Long is the Duration of a General Tax Lien?

 Nothing lasts forever. The same is true with tax liens. A general tax lien exists when the assessment is made. It continues until the taxpayer satisfies the assessed amount of tax liability, or it becomes unenforceable by the lapse of time.     

Duration of General Tax Liens 

As stated above, an IRS tax lien becomes unenforceable by the lapse of time. The term “lapse of time” would signify a certain limit of time for which something exists or is in effect. In the case of a general tax lien, its duration is dependent on the statute of limitations for collection after assessment.   

The period for collection after an assessment is ten years after the date of assessment. This means that if a levy or an action for collection is not taken to court within ten years, it will not be valid. Since the general tax lien has the same duration as the statutory collection period, a general tax lien will expire and become unenforceable after ten years unless the IRS collects the tax before the period ends.   

Exceptions to the Ten-Year Period 

The statutory period for assessment admits exceptions, including several ways to extend the period by agreement. However, the ten-year statute of limitations for collection after an assessment is unextendible by agreement after December 31, 1999. Yet again, there are two (2) exceptions to this: 

  1. If the taxpayer and the IRS have entered into an installment payment agreement that provides an agreed-upon period for collection before the ten-year period expires, the IRS may collect during the ninety days after the agreed-upon period expires. 
  1. If the taxpayer and the IRS have agreed upon a release of the levy after the ten-year collection period expires, the IRS may collect within any period they have agreed upon. 

 In an installment agreement, the taxpayer and the IRS may agree on a limited extension of the collection statute. The tax may be collected until 90 days after the expiration of any period for collection agreed upon, which must be in writing. 

Suspension of the Statute of Limitation 

Since the statute of limitations on collection starts on the date tax is assessed, the suspension of the statute of limitations on assessment affects the running of the statute of limitations on collections. The same rules apply to the statute of limitations on collection also apply to the tax lien’s duration. If the period for collection is extended by agreement, the period for the lien is also extended. On the other hand, the period of the lien is extended if the running of the statutory period on collection is suspended under the circumstances: 

  • Issuance of a notice of deficiency; 
  • The taxpayer’s assets are in a court’s control or custody; 
  • The taxpayer is outside the United States; 
  • Wrongful seizure of a third party’s property to satisfy the taxpayer’s tax;  
  • Bankruptcy proceedings have commenced; or 
  • The taxpayer requests a Taxpayer Assistance Order from the Taxpayer Advocate (IRS, Section 6503). 

By Guest Author

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