What is the Federal Tax Lien Statute of Limitations?

What is the Federal Tax Lien Statute of Limitations?

Do you know what you need to about a federal tax lien statute of limitations? A tax lien is a hold on property and assets placed by the IRS on the accounts of taxpayers who have defaulted on their required tax payments for a long time.

A tax lien may be placed on your property as a result of the amount you owe in personal property, real property, or as a consequence for your failure to resolve your income (and other) taxes. This doesn’t mean that your asset will be confiscated, what is simply means is that the IRS gets the first rights to your assets. To put this in an example, if you sell a property that has an IRS tax lien on it, then the IRS gets the first share of the profits.

If you have failed to resolve your tax debt for a lengthy period of time, then you might be familiar with what it is like when the IRS places a lien on your assets. Receiving a notice informing you that a tax lien has been placed against your assets is a scary ordeal; however, federal taxation laws give the IRS only a limited period of time to enforce the tax lien placed on your property. You need to know more about a federal tax lien statute of limitations in order to be better informed regarding the next step to take.

What is a Statute of Limitations?

Simply put, a statute of limitations is the legal duration of time during which an entity is permitted to carry out an action. In other words, a statute of limitations is the amount of time during which a tax lien that has been placed on your account can remain active.

There are different amounts of time stipulated for different types of debts. Additionally, each state defines its statute of limitations a little differently from the other.

What is the duration of a Federal Tax lien Statute of Limitations?

Generally speaking, the IRS usually has a window of 10 years to collect on your delinquent tax debts through an active tax lien. After the period of 10 years has elapsed, the IRS has no rights over your property anymore, meaning that the federal tax lien statute of limitations has expired.

If you are currently facing financial difficulties that hinder you from paying your taxes, there are several options available to you. If you contact us now (link) we may be able to get your account into “currently not collectible” status, and if this happens, then all collection activities placed on your account by the IRS will be halted. If your financial situation doesn’t improve before the statute of limitations on the lien expires, then the lien will be lifted while your account is still in currently not collectible status.

Are there circumstances that could prolong a Federal Tax Lien Statute of Limitations?

Additionally, there are certain conditions that may prolong the duration of your federal tax lien statute of limitations. If, for example, you file for bankruptcy, the court may issue an automatic stay. This means that the IRS will not be able to make collection efforts on any debts associated with the bankruptcy and the federal tax lien statute of limitations will be on hold.

The IRS’s procedures could also prolong the duration of a federal tax lien statute of limitations. This is so because the clock on your federal tax lien statute of limitations is paused while the IRS goes through the processes of considering your request.

Also, voluntarily entering into a repayment agreement with the IRS may extend the duration of a federal tax lien statute of limitations. Seeking the help of a qualified tax firm like ours is your best option, as you may ignorantly sign a document that waives the statute of limitations on your federal tax lien, giving the IRS an unlimited amount of time to collect on the debt.

If you have a tax lien that has been placed against your assets or property, call us today for immediate assistance. We are a tax relief firm dedicated to giving you the best results regarding resolving your tax debts. Our team of qualified professionals is available round the clock to provide you with the assistance you need. Contact us now at 888-585-8629 or 617-430-4674 or send us an email at help@newstarttaxconsulting.com.

For more information, email info@newstarttaxconsulting.com