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Tax Lien FAQs: Federal Statute of Limitations & More

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If you’ve found yourself unable to pay the taxes you owe, you may have to deal with a tax lien at some point. Like any financial penalties or demand for payment that come from the Internal Revenue Service, tax liens can be scary. But knowledge is power. Every taxpayer should take some time to find out important tax facts, such as how long the federal tax lien statute of limitations is.

What Is a Tax Lien?

A tax lien is essentially the government putting a claim on your property—including any real estate, personal property and other financial assets—when you fail to pay taxes owed. This doesn’t mean your property will be seized. It just means the taxing entity gets first right to your assets over other creditors and yourself. For example, if you sell a property that has a tax lien on it, the IRS gets first dibs on the profits.

When Does the IRS File a Tax Lien?

According to the IRS, it can file a Notice of Federal Tax Lien when a business or person fails to pay taxes after receiving a Notice and Demand for Payment. Tax liens are a standard part of the IRS debt collection process. You will receive a notice and a demand for payment from the Internal Revenue Service. If you do not pay or make arrangements to pay after a lien has been placed, you may receive a Final Notice of Intent to Levy and a Notice to Your Right to a Hearing.

What Is a Tax Levy?

While a lien is a legal claim against your property, a levy is the actual seizure of that property to satisfy a tax debt. If you do not make appropriate arrangements when a lien is placed on your property, you may be subject to a tax levy. Levies are not public record, are not reported to the credit bureaus and will not affect your credit score.

Are State and Federal Tax Liens the Same Thing?

Both federal and state taxing authorities can place a lien on your assets, either for unpaid property taxes, unpaid income taxes or other delinquent taxes. When and how a state will issue a tax lien depends on each state’s policies, though. Tax lien statutes of limitations also vary by state. To find your state’s policies, check the website of your state tax commission or department of revenue.

What Is a Statute of Limitations?

A statute of limitations is the legal length of time an entity has to collect a debt. It’s a different amount of time for various types of debts, and each state has laws about certain debts that define unique statutes of limitations.

What Is the Federal Tax Lien Statute of Limitations?

In most cases, the federal statute of limitations runs for 10 years. However, the clock doesn’t run on this statute of limitations during certain periods of time. If you file for bankruptcy and the court issues an automatic stay, for example, the IRS isn’t allowed to try to collect debt associated with the bankruptcy. During that time, the statute of limitations is on pause.

The IRS’s own internal processes can also pause the statute of limitations. If you file for any type of tax relief or payment plan, the clock is paused while the IRS processes and considers your request. These potential pauses on the statute of limitations clock mean the IRS could pursue the debt longer than 10 years if you don’t end up satisfying it.

You may also voluntarily extend the limitations period. If you agree to an installment payment plan, you may be asked to sign an agreement waiving the federal tax lien statute of limitations period. Discuss this option with a tax attorney before agreeing to such an extension.

When Does the Time Period Under the Statute of Limitations Start?

The tax lien statute of limitations starts when the tax debt is assessed. Typically, that’s the date the Internal Revenue Service sends you the tax bill for the debt in question. Note that it’s not the date you receive the bill.

Do Tax Liens Affect Your Credit Score?

Starting in 2018, tax liens are no longer listed on credit reports. This is due to a decision and agreement on behalf of the credit reporting bureaus. The bureaus made this decision because so many liens were being misreported, causing credit report errors and extensive need for credit repair.

However, taxes can have other effects on your credit score. The government can also initiate wage garnishment if you fail to pay your taxes, which could affect your ability to pay any other debt.

Do Federal Tax Liens Have Priority Over Mortgages?

An IRS lien doesn’t have priority over your mortgage, but it can delay or block the sale of property in some cases. Mostly, though, the tax lien puts the IRS first in line for any profits related to the sale of your property.

Other taxes, however, may have different impacts to your mortgage. In some cases, not paying your property taxes may endanger your ownership, for example.

What Is a Tax Sale?

If you do not pay your property taxes and a tax lien is placed on your home, the taxing authority has the right to try to recoup the amount you owe by seizing your home and selling it. This is known as a tax sale, and all states have laws that allow local government entities to sell your home through the tax lien process to collect your delinquent taxes. According to NOLO, it’s rare for the IRS to force the sale of a home to recovery tax debt.

What Happens After You Pay or Settle a Tax Debt?

The IRS has 30 days to release a tax lien once the debt is paid off, according to Internal Revenue Code 6325. But paperwork often gets overlooked, and tax liens often stick around past their metaphorical expiration dates.

What Should You Do If the IRS Doesn’t Release the Lien After You Pay?

Contact the Lien Desk by phone at 1-800-913-6050 or by fax at 1-859-669-3805. Ask for assistance in getting a tax lien released and state that you have documentation showing that you have settled the debt. If necessary, work with a tax professional to help you remove a tax lien.

How Can You Protect Your Credit from Tax Debt Issues?

Because tax liens no longer show up credit reports, they shouldn’t impact your credit score. But if you want to check your credit for old tax liens, you can get a free copy of your report at Credit.com.

Remember that your tax situation could have other negative impacts on your credit score. While you’re dealing with a lien or paying down tax debt, don’t forget the importance of managing your other finances properly. Sign up for a free Credit Report Card to find out exactly where your credit score might be suffering so you can take intelligent, proactive action to fix it.


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  • Steve Clark

    Thank you , This is very helpful!

    • http://www.Credit.com/ Gerri Detweiler

      Glad to hear it!

  • Confused

    How do I contact the 3 credit bureaus to submit a tax lien release from the state of Michigan?

    • http://www.Credit.com/ Gerri Detweiler

      Have you ordered your credit reports from AnnualCreditReport.com yet this year? If not that would be your best bet. That way you’ll have contact info and a credit report number to use when you submit your dispute.

      I’d also suggest you get your free credit score now so you can monitor how it changes when this information is removed.

      • Mike G

        Regarding a lien that’s been released and still on my credit report: I read somewhere that if its been paid/released, the entry can no longer report after 7 years from the date it was FILED. Is this correct? because I’ve read elsewhere it can be reporting for 7 years from the date of PAID or RELEASED.. Which is it?

        • http://www.Credit.com/ Gerri Detweiler

          The Fair Credit Reporting Act says: “Paid tax liens which, from date of payment, antedate the report by more than seven years” (cannot be reported).

          If this is a federal tax lien, you may want to find out if you qualify for the Fresh Start program to have it removed.

  • http://www.Credit.com/ Gerri Detweiler

    Ugh!! Have you tried appealing to your state or local legislator for help? It may be worth a shot…

  • http://www.Credit.com/ Gerri Detweiler

    Have you tried filing a complaint with the Consumer Financial Protection Bureau? The other alternative would be to talk with a consumer law attorney with experience in credit damage lawsuits. You may have a case…

  • Debit

    what if you don’t owe any taxes and the file a lien anyway. I had a tax attorney refile my returns and they all netted out to a loss but IRS filed the lien anyway

    • http://www.Credit.com/ Gerri Detweiler

      That’s a situation where you’ll need to get your tax attorney involved.

  • http://www.Credit.com/ Gerri Detweiler

    The Fresh Start initiative is only for federal taxes. You will have to check with your state taxing authority or a tax professional to find out what applies at the state level.

  • http://www.Credit.com/ Gerri Detweiler

    Chained – I am really sorry to hear what you have been through. Have you looked into whether you can file bankruptcy to get rid of this debt? It may be time to revisit that if you haven’t dealt with it in a while. Unfortunately unpaid tax liens remain on credit reports indefinitely, but my understanding is that if you discharge the debt it should be off your reports since it is more than 7 years old.

  • http://www.Credit.com/ Gerri Detweiler

    Certain taxes and student loans may be discharged in bankruptcy. Talk with a tax professional who is familiar with this and other options. It may not be ideal to file, but an unpaid tax lien hanging out there indefinitely is not good either. It’s in the same general category as bankruptcy in terms of the effect on your credit.

  • Nick

    I had state tax liens on my credit report for many years, never paid them and never was bothered by the state. they have ben on my credit report for many years dating back to 1992.
    2 weeks ago I ran my credit thru all 3 bureaus, because I am looking to buy a home.
    I was surprised to find out that all of my records were cleared, no public information.
    Had the mortgage guy run a search as well and nothing showed up?
    What does this mean? I’m nervous, because I don’t want to be a week away from closing and then not be able to close if something pops up then. Can you give me some advise? Please

    • http://www.Credit.com/ Gerri Detweiler

      Sometimes the credit reporting agencies stop reporting those very old negative items even when they are unpaid. Hopefully you are in the clear but I don’t know of a way to guarantee that before closing!

  • Bobbie Pojeta

    Was the lien placed after you were married even though it was for prior years? Or did he have the lien placed on him before you got married?

  • Stu

    I have 3 old federal tax liens from 2002 – 2004 that are unpaid and the amount I will never be able to repay. Is it possible to get these dismissed with I believe the statue of limitations being 10 years and removed from my credit report?

    • http://www.Credit.com/ Gerri Detweiler

      Stu – I would suggest you talk with a tax professional who works with taxpayers who owe tax debt they can’t pay. You may be able to get an Offer in Compromise or file for bankruptcy to get rid of this tax debt. A professional can evaluate your situation and help you come up with a game plan. See: The Complete Guide to Finding Tax Help

  • Wolf2944

    What if you have a state Tax lien for over payment of Unemployment payments. The state is Idaho ?

    • http://www.Credit.com/ Gerri Detweiler

      This article outlines procedures for federal tax liens. You will have to check with your state to see how they handle state tax liens. I don’t have a comprehensive list of how that works in each state unfortunately.

  • Hemi

    I was looking at my credit report and see a tax lien on it, but I don’t know where it’s from. It’s not from my state, my previous state, or the Feds. How do I track it down?

    • http://www.Credit.com/ Gerri Detweiler

      Ask the credit reporting agency for more information. If they can’t provide it, dispute it. If they can’t verify it, it will be removed. It’s possible that it’s a mistake.

  • JonathanE

    Is there any way for a California state tax lien that’s been fully paid and “released”, to be removed from my credit reports? I owed money to the state of California in 2010 for 2009 taxes and entered into a payment plan. Just 58 days after they filed a lien, I was able to pay the taxes in full and the lien was released about two months later. But here it is, five years after that and it’s still on my credit reports and damaging my credit scores severely. It seems unfair to be harmed so much for 7 years because I owed some money for 58 days and paid it in full. If it was federal and not state, it would be removed from the credit reports, thanks to the “Fresh Start” program. Thanks!

    • http://www.Credit.com/ Gerri Detweiler

      I am not sure what California offers in terms of this kind of relief. You’ll need to talk with a tax professional in California.

  • Hannah Henderson

    Hello, I was fortunate enough to include my IRS debt in my bankruptcy a few years ago. Should this not have released my tax liens and also cleared them from my credit?

    • http://www.Credit.com/ Gerri Detweiler

      It may have released your liability but the liens can remain on your credit reports for seven years from the date they were filed. I am not sure whether you can use IRS Form 12277 to ask that it be withdrawn in this situation but it’s worth looking into.

      • Hannah Henderson

        Thank you for your help I will check into that 🙂

        • http://www.Credit.com/ Gerri Detweiler

          Please let me know if it works!

  • Agni

    Hi
    I got 3 federal liens and it was released now since I didn’t file my tax return. After filing the return, IRS found that I don’t owe any money for them and so they released the liens from my name. When I checked the credit report, all 3 credit agencies are showing them as released. I would like to get your help on how to remove them from the report since I never paid any of those liens.
    Thanks in advance.

  • Matt

    My ex and I have been separated for over 3 years but we still own a rental property together (Actually the mortgage is in my name, but both our names are on the title). I was going through the process of him signing a quitclaim when a title search found that there were tax liens on the property because he had not paid taxes for multiple years. We were not married (we are both men). Can I get these liens removed since I pay the mortgage and he has no real financial value in the property? How will this affect my credit and trying to buy a house in the future?

    • http://www.Credit.com/ Gerri Detweiler

      Matt – I am not sure I completely understand your question but liens remain on your credit reports for seven years if they are paid and longer if they are paid. If you want to get them removed from your credit reports you will need to a. satisfy them and get a release of lien filed and then b. make sure the time period for reporting them has passed. The exception is the IRS Fresh Start program which allows taxpayers to request removal if they are repaying their debt under a repayment program. In addition, if the tax liens came from state or local taxing authorities you will have to check with them about what their policies are.

  • http://www.Credit.com/ Gerri Detweiler

    Yes these tax liens may affect your ability to get a mortgage. The problem, as I understand it, is that with your ex on the title he has interest in the property and the IRS is trying to protect that interest with the lien. You’re going to need to talk with a tax expert who resolved tax problems to find out how/whether you can get these liens off the property so you can move forward.

  • angelina moreaux

    I went to the bank to get a loan and wasn’t able to succeed because of a state tax lien pending on my credit. my banker informed me that the lien came about in 2006 and the amount I owe is $652.00. Now my question is how can I get this problem resolved and if I don’t pay what will happen. I know that if I have any property in my name the can take it but if its in my husbands name can they still do anything. I’m already paying student loans back and this lien is the last thing I need pending against me. I need help!!! What can I do???

    • http://www.Credit.com/ Gerri Detweiler

      Tax liens that are unpaid can remain on your credit reports indefinitely. Once you pay it, you should be able to get it removed from your credit reports since it’s so old. If you don’t pay it, interest may continue to accrue but how much depends on state law. You could try talking to your state taxing authority to find out if you can resolve it through a payment plan and get it off your credit. If it’s in your husband’s name only it probably should not be on your credit reports.

  • Virginia

    I have a released Nebraska State Tax lien which was filed om 8/26/2008. Experian and Equifax have removed the liem from the Public Records portion of my credit report. TransUnion refused to do so. They say they are reuired by law to show the tax lien for 10 years. If Equifax and Experian are able to remove the item why can’t TransUnion. Do you have suggestions? I have asked, pleased and begged to no avail. I am applying for a home mortgage and this is hurting my credit score
    Thank You

    • http://www.Credit.com/ Gerri Detweiler

      The Fair Credit Reporting Act says that paid tax liens may be reported for seven years after they are paid. Specifically it says: “Paid tax liens which, from date of payment, antedate the report by more than seven years.” So it would depend on when you paid it, not when it was filed. (Though why they are saying 10 years I am not sure.)

    • Christina Gonzalez

      How did you get them to remove them from your record? I had a tax lien in 2010 it’s been paid but I don’t know how to get it removed.

      • http://www.Credit.com/ Gerri Detweiler

        If it is a federal lien file IRS form 12277. If it’s a state tax lien you can contact your state department of taxation for information.

  • Elizabeth Wages

    I owned a property with my mother, she sold the home in 2013, I received no money from the selling of the home. My mother paid the lein November, 2014 but the lein still shows in my name. How do I clear my name?

    • http://www.Credit.com/ Gerri Detweiler

      Did you/she get a release and satisfaction when she paid off the lien? If so, get a copy and use that when you dispute it on your credit reports. If not, you can still dispute it but I’d recommend you also contact the court where the lien was filed and ask the procedure for requesting that. Please read: A Step-By-Step Guide to Disputing Credit Report Mistakes

  • http://www.Credit.com/ Gerri Detweiler

    I was talking about the program that allows you to request a tax lien be removed from your credit. Please read: How to Make Your Tax Lien Disappear

  • Katie

    I live in wisconsin and i’m going through chapter 7 bankrupcy and my tax debts are old enough to be discarged. Will my liens get released?

    • http://www.Credit.com/ Gerri Detweiler

      If your tax debt is discharged the liens should be released since there will no longer be a debt owed. It would be a good idea to ask your attorney to make sure there’s nothing else you have to do.

  • Keith Moles

    I have never paid income taxes in my life. The IRS filed a tax lien for 3 or 4 years when I was self employed and taxes weren’t being withheld. This has been on my credit for about 4 years now. They say I owe around $80,000 for just those years. I think it’s unfair they can charge penalties and interest for what I owe but I can’t collect interest for what they owe me or possibly not be able to collect all of what’s owed to me. I would like for this to balance out and go away. I’m 37 what should I do?

    • http://www.Credit.com/ Gerri Detweiler

      We’ll have to suggest you talk with a professional who helps individuals resolve tax problems. It’s a complex matter and they will have to help you figure out the appropriate strategy.

  • Clondon04

    I have a tax lien recently my collections went past the 10 yr statue of limitations and the IRS dismissed my debt, when will the liens fall off my credit report? they have been on there since 8/2006.

    • http://www.Credit.com/ Gerri Detweiler

      It sounds like you should be able to get them off there now. Do you have anything in writing from the IRS? If so you can dispute it with the credit reporting agencies by including a copy of that documentation. Read: A Step-By-Step Guide to Disputing Credit Report Mistakes


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