When Does an IRS Federal Tax Lien Expire and Become Unenforceable?
An IRS tax lien is not forever. It does expire – here is an overview of when:
The IRS has 10 years to pursue you for the unpaid taxes that caused the lien to be filed. The 10 years starts on the date the tax is assessed.
After the 10-year collection timeframe expires, so does the IRS tax lien.
Beware: Sometimes you might do something that gives the IRS more time to collect. This can have an impact on a Federal tax lien.
Any event that prevents the IRS from collecting the debt has the potential to extend the Statute of Limitations. These are events like the filing of bankruptcy, collection due process appeals, submitting an Offer in Compromise, an extended time period residing outside the U.S., or an Innocent Spouse Petition. Because these actions stop the IRS from collecting, that time is added back on to the collection statute.
The tax lien will still expire at the end of 10 years – even if the IRS has more than 10 years to collect – unless the IRS timely refiles the lien.
If the IRS timely refiles the tax lien, it is treated as continuation of the initial lien.
The refiled tax lien will be valid for the extended timeframe the IRS has to collect – it is good for the extra time you gave the IRS to collect. It maintains any priority it has against liens of other creditors. See Internal Revenue Code 6323(g)(3) and Internal Revenue Manual 5.17.2.3.3.
However, if the IRS does not refile the tax lien within 30 days per IRC 6323(g)(3), the original lien expires and is no longer valid.
If the IRS refiles a new tax lien after 30 days, then it is still a valid lien, but it is not considered a continuation of the original lien because it was filed late. It is a new lien, and its priority against other creditors starts on the day it is filed. For a period of time, other creditor’s liens now jump ahead of the IRS.