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Federal Tax Lien Statute of Limitations 2024 – All You Need to Know

Owing money to the IRS is scary. Not only are you in debt to the government, but they can also take serious action to retrieve what they are owed. This can cause problems in your personal, professional, and financial lives.

A tax lien is one method that the IRS may use to retrieve their debts. If you get a notice of a tax lien, it is important to remain calm but act quickly. The actions can escalate quickly once a tax lien is in place.

What Is a Tax Lien?

A tax lien is a claim that the IRS makes on your assets. They do not take them from you in this step. However, they are claiming your assets as potential compensation for your debts. If necessary, they can move forward to create a tax levy, which is when they take your assets from you.

A tax lien will prevent you from being able to fully utilize your assets. You may not have access to equity during this time, and many people experience difficulty obtaining credit. Although the credit bureaus no longer report tax liens, the information is public. Creditors, potential employers, and scammers can all see that you have a tax lien against you. This may inform the actions that they take.

Tax liens also affect the types of security clearances for which you are eligible. This may prevent you from performing certain aspects of your job. It can also keep you from getting a new job that requires a security clearance.

Tax Lien Lengths

Tax liens do not last forever. In most cases, the IRS has 10 years to collect overdue taxes. After this time, the debt is wiped clean, and they can no longer harass the taxpayer.

Although this may seem like a beacon of hope, it is important to understand that the IRS takes alternative actions in most situations. Long before the 10-year statute of limitations expires, the IRS may:

  • Create a tax levy.
  • Garnish your wages.
  • Sell the tax lien.

There are other actions that they can take to collect the money that you owe. The statute of limitations for tax liens expires if all other methods of debt collection fail.

The ideal way to avoid 10 years of anxiety about your debt is to find an alternative solution with the help of a qualified tax attorney.

Potential Tax Lien Solutions

If you have a tax lien on your assets, there are several steps that you can take to resolve the issue and avoid further IRS action. Perhaps most obviously, the first step should be to pay your debt in full if it is possible to do so. This is the simplest way to end a tax lien.

Many people are unable to pay the full balance, which is why the IRS turned to a tax lien in the first place. In these situations, it is important to find an attorney. A tax attorney can negotiate a tax settlement that would allow you to pay less to have your debt resolved. In these situations, the IRS gets some of the taxpayer’s money, and the taxpayer is not liable for the full amount. This is advantageous for both parties. Your attorney may also be able to negotiate a payment plan. This can ease the financial burden of repaying your debt.

There are additional options that may be available to you depending on your circumstances. This is why it is important to speak to a tax attorney right away.

FAQs About Florida Federal Tax Lien Statute Of Limitations

How Long Can the IRS Keep a Lien on You?

IRS tax liens have a statute of limitations of 10 years. After 10 years, the IRS must remove the lien, and your debt is wiped clean. However, it is not as straightforward as it seems. In most cases, the IRS takes alternative actions to collect the debt before the lien can expire. You should expect increasingly severe tactics during the 10-year statute of limitations.

What Happens When an IRS Lien Expires?

When a tax lien expires, the IRS removes it from your assets and writes it off in their records. After that, you no longer have debt with the IRS. Most tax liens expire after 10 years. Unfortunately, the IRS often takes alternative actions, such as wage garnishment and levies, before the lien expires.

What Stops the IRS Statute of Limitations?

The “timer” on your tax lien will pause if you:

  • File for bankruptcy.
  • File an appeal.
  • File an offer in compromise.
  • Leave the country for six months or more.
  • File a legal claim against the IRS.

This can extend the number of years between when the tax lien began and when it expires. Generally, a tax lien has a statute of limitations of 10 years.

How Much Does a Tax Lawyer Cost?

Attorneys have personal fees for their services, so it is difficult to say how much your tax attorney will cost. Many tax attorneys charge a specific rate based on the service they are providing, while others charge by the hour.

It is important to note that a tax attorney offers you several advantages. These include potential tax settlements and alternative payment plans, as well as other solutions to your tax problems. For many people, the benefits of a tax lawyer outweigh the investment.

Trust TaxSmith, LLC

Our team at TaxSmith, LLC, has many years of experience in state and federal tax law. During our time in business, we have gained valuable insight into a variety of tax issues and solutions. This gives us an advantage over our local competitors. We offer creative solutions to a variety of tax problems, non-judgmental advice, and honest resources for your legal issue. You may be intimidated by tax law and your tax problem. We feel confident that we can work with you to find a solution that works for your circumstances. No two situations are the same, so we focus on personalized legal solutions for your tax and IRS problems.

If you are facing a tax lien, tax levy, wage garnishment, or another IRS issue, do not hesitate. Contact TaxSmith, LLC, today.



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